Munis continue firming trend; Texas' Conroe Independent School District brings $133 million

By Sheri Kasprzak

New York, May 16 - Municipal yields were yet again firmer on Monday as there was little supply to rock the market from its recent rally, said traders. Meanwhile, a few major offerings could be in the works later this year, insiders reported.

"There's not a lot going on," said one trader when asked about trading volume.

"There are bits and pieces trading here and there, but not a lot of activity. We're probably firmer by a basis point or so, but there's not a lot of movement. We're basically waiting on supply later this week. We'll see how it gets digested."

Heading up Monday's light primary action, the Conroe Independent School District of Texas sold $133 million of series 2011 unlimited tax refunding bonds, said a pricing sheet.

The bonds (Aa2) were sold through BOSC, Inc.

The bonds are due 2015 to 2026 with 2% to 5% coupons.

Proceeds will be used to refund the district's series 2001A, 2003, 2003A, 2004A and 2005C bonds.

Connecticut preps deal

Looking to Tuesday's primary action, the State of Connecticut is gearing up to price $326.915 million of series 2011 general obligation bonds through M.R. Beal & Co. Inc.

The offering includes $237.87 million of series 2011B tax-exempt G.O. bonds and $89.045 million of series 2011B taxable G.O. bonds.

The state conducted a retail order period on Monday after a preliminary retail order period was conducted Friday.

Proceeds from the sale will be used to fund capital requirements and retire bond anticipation notes.

California plans $3.9 billion

California treasurer Bill Lockyer said Monday that the state's revised budget recognizes that the state must close ongoing deficits without "short-circuiting the state's economic recovery."

Even so, Lockyer noted that the plan's impact on the state's ability to borrow $10 billion to meet its cash flow needs is unclear.

"If full implementation of the governor's [fiscal-year] 2011/12 plan remains contingent upon voter approval of taxes, my office will not be able to complete a cash flow borrowing transaction unless the final adopted budget includes real, inescapable, quickly implemented spending cuts that would be triggered if voters reject the taxes," Lockyer said in a statement.

According to Lockyer, the revised budget assumes the state will sell $3.9 billion of G.O. bonds during the coming fiscal year - $1.53 billion in the fall and $2.37 billion in the spring of 2012. The current budget plan also assumes the sale of $2.04 billion of lease revenue bonds with $1.02 billion being sold in the fall and another $1.02 billion being sold in the spring of 2012.

"Combined with other steps the administration plans to take, the bond sales should provide sufficient funds to start high-priority infrastructure projects and keep current projects going through the end of fiscal year 2011/12," said Lockyer.

Nassau, N.Y., may bring bonds

Elsewhere, Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC, said that Nassau County, N.Y., is holding a bond referendum for $400 million to upgrade its National Hockey League stadium.

"The New York Islanders NHL hockey club possesses a phenomenal, young and talented star in second-year player John Tavares," Kozlik said. "Now the team hopes to finally upgrade the Nassau Veterans Memorial Coliseum, their current home stadium, to a state-of-the-art facility."

The county will ask voters to approve the $400 million bond financing on Aug. 1, according to Kozlik.

In addition to the hockey stadium upgrades, $50 million of the issue will be used for a minor league baseball park, Kozlik said.

"While an upgrade to a new stadium would likely help the team return to profitability, we are not too sure how voters will react to such a request considering the current economic environment, especially within the county."

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