Muni yields unchanged, off a bit as new deals keep flooding market; BATA sells $885 million

By Sheri Kasprzak

New York, Oct. 28 - Municipal yields closed out Thursday a touch weaker in spots but largely unchanged, market insiders reported.

"Those middle bonds are the ones still struggling," noted one trader.

"Today it's not so bad. Ten-year bonds might be up a basis point or so. Otherwise, it's been quiet."

Meanwhile, primary action continued to dominate the market, led by an $885 million offering of bridge toll revenue bonds priced by the Bay Area Toll Authority of California. The offering was upsized from $800 million, and one sellsider connected to the deal said that was significant.

"I do think it was more of a retail-oriented deal, so the fact that it upsized is significant," he said.

"It went really well. Both tranches were upsized, and there was really good demand."

The deal included $410 million of series 2010S-2 tax-exempt bonds and $475 million of series 2010S-3 Build America Bonds.

The 2010S-2 bonds are due 2019 to 2034, with term bonds due 2042 and 2050. The serial coupons range from 3.25% to 5%. The 2042 bonds have a 5% coupon priced at 102.35. The 2050 bonds have a 5% coupon priced at 100.383.

The 2010S-3 bonds are due Oct. 1, 2050 and have a 6.907% coupon priced at par.

The bonds (A1/A+/) were sold on a negotiated basis with Citigroup Global Markets Inc. as the lead manager for the 2010S-2 bonds and Bank of America Merrill Lynch as the lead manager for the 2010S-3 bonds.

Proceeds will be used to fund capital improvements, including the replacement of portions of the San Francisco-Oakland Bay Bridge.

San Antonio bonds price

Elsewhere, the City of San Antonio brought $500 million of series 2010 electric and gas systems junior-lien revenue bonds on Thursday, said a pricing sheet.

The offering included $300 million of series 2010A Build America Bonds and series 2010B refunding Build America Bonds.

The 2010A bonds are due Feb. 1, 2041 and have a 5.808% coupon priced at par. The 2010B bonds are due Feb. 1, 2037 and have a 6.308% coupon, also priced at par.

The bonds (Aa1/AA/AA+) were sold on a negotiated basis. J.P. Morgan Securities LLC was the senior manager for the 2010A bonds, and Bank of America Merrill Lynch was the senior manager for the 2010B bonds. Proceeds will be used to construct capital improvements to the city's gas and electric systems, as well as to refund existing commercial paper notes.

San Diego brings deal

In other news, the San Diego County Regional Transportation Commission priced $350 million of series 2010 sales tax revenue bonds on Thursday, said a pricing sheet.

The sale included $340 million of series 2010A Build America Bonds and $10 million of series 2010B tax-exempt bonds.

The 2010A bonds are due April 1, 2048 and have a 5.911% coupon priced at par. The 2010B bonds are due 2011 to 2026 with a term bond due 2030. The coupons range from 2% to 5%.

Barclays Capital Inc. was the senior manager for the bonds (Aa1/AAA/).

The proceeds will be used to finance or refinance commuter projects, including trolley and highway improvements.

Dallas sells revenue bonds

In other transportation offerings, the cities of Dallas and Fort Worth in Texas priced $304.395 million of a slightly upsized offering of series 2010A joint revenue improvement bonds for the Dallas-Fort Worth International Airport, said a term sheet. The original offering size was $301 million.

The bonds (A1) were sold through Jefferies & Co. and Loop Capital Markets LLC.

The bonds are due 2038, 2042 and 2045 with 5% to 5.25% coupons.

Proceeds will be used to finance capital improvements at the Dallas-Fort Worth International Airport, including terminal renewals and improvements.

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