Municipals start shortened week flat; Chicago Board of Education $574.3 million sale ahead

By Sheri Kasprzak

New York, Sept. 8 - Municipals got back down to business on Tuesday following a long weekend, but the market just couldn't wake itself back up, market insiders reported.

One trader in the Midwest said the market's tone was mostly flat amid light trading activity.

"There's just a bit of strength on the long end, but it's mostly flat," he said.

Another trader agreed that the market was very quiet following the Labor Day holiday.

"It's very quiet," said one trader reached in the afternoon.

"I don't really have much to report. It's usually this way after a holiday weekend, so nothing too unusual."

During the trading session, the city of Waterbury, Conn.'s recently priced taxable pension bonds were moving. The 7.089% 2038 bonds were seen at 6.907% after pricing at par.

Elsewhere, the recently priced Build America Bonds from the Upper St. Clair Township School District in Pennsylvania were trading. The 6.086% 2039 bonds were seen at 5.78%. Those bonds also priced at par.

In other trades, the Mobile Public Educational Building Authority of Alabama saw its 4.75% 2029s at 4.721%.

Chicago education bonds ahead

The primary market during the week will feature only a few major offerings, but the largest sale comes from the Chicago Board of Education. The board plans to sell $574.335 million in series 2009 general obligation bonds.

The offering seems to be getting some mixed reactions in the marketplace.

One sellside source said he feels the board may have some trouble achieving decent pricing.

"It may go cheap," he said. "But it's tough to tell. There's a big market right now for high-grade munis. We'll have to wait and see how it goes."

Another sellsider, however, said he feels the sale will go just fine.

"I don't see why it wouldn't go well," he said.

"Just because there's a big market for high-grade municipals doesn't necessarily mean an A-rated name won't price well."

On Thursday, the board plans to price the offering, which includes $501.915 million in series 2009E unlimited tax G.O. Build America Bonds and $45.42 million in series 2009F tax-exempt unlimited tax G.O. bonds.

Merrill Lynch & Co. Inc. is the senior manager.

Proceeds will be used to fund capital improvements throughout the city's schools.

New Mexico education sale planned

Also on Thursday, the New Mexico Educational Assistance Foundation is expected to price $299.335 million in series 2009 education loan bonds on Thursday, according to a sales calendar.

The deal includes $42.5 million in series 2009A weekly rate senior bonds, $197.76 million in series 2009B fixed-rate senior bonds and $59.075 million in series 2009C fixed-rate senior bonds.

The bonds (Aaa/VMIG1//AAA/F1+) will be sold on a negotiated basis with RBC Capital Markets Corp. and Merrill Lynch as the senior managers.

The series 2009A bonds are due Nov. 1, 2028, and the 2009B bonds are due 2010 to 2020. The series 2009C bonds are due 2010 and 2014 to 2015.

Proceeds will be used to refund several outstanding bonds.

Galveston road bonds to price

In other sales planned for the week, Galveston County in Texas is expected to price $135 million in series 2009 road and building bonds, according to a sales calendar. The sale is planned for Wednesday.

The deal includes $75 million in series 2009A-1 unlimited tax road bonds and series 2009A-2 Build America Bonds; $45 million in series 2009B-1 and 2009B-2 limited tax county building bonds; and $15 million in series 2009C-1 and series 2009C-2 Build America Bonds.

Coastal Securities Inc. is the senior manager for the bonds (Aa2//AA).

Proceeds will be used to fund roadway improvements, building construction, and drainage and flood-control improvements.

DeKalb plans art center sale

Out on the horizon, the Development Authority of DeKalb County in Georgia is set to price $125.2 million in series 2009 refunding revenue bonds for the Robert W. Woodruff Arts Center, Inc. Project, according to a preliminary official statement.

The offering includes $5 million in series 2009A bonds and $120.2 million in series 2009B bonds.

The bonds (A2) will be sold on a negotiated basis with Merrill Lynch and Wells Fargo Securities Inc. as the senior managers.

The maturities have not been set.

Proceeds will be used to finance or refinance the construction of the Robert W. Woodruff Arts Center in Atlanta, as well as to refund the authority's series 2002 and 2004 bonds.

The authority is based in Decatur, Ga.

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