Munis finish lower ahead of deal-packed, shortened week; NYC Transitional Finance to price

By Sheri Kasprzak

New York, Oct. 9 - Municipals rounded out the week on a weaker note, carrying on a weeklong trend, as the market prepares for a shortened week packed with new issues.

"It's certainly not stopping issuers from putting their deals out there," one sellside source reached Friday afternoon said of the shorter week.

Meanwhile, the State of California's bonds that priced Thursday were moving in secondary Friday. The 4% 2017 refunding bonds were seen at 3.7% in the afternoon and the 5% 2029s were seen at par. The 4% 2018s were seen at 3.7%.

Monday is Columbus Day, and the municipals market won't be operating, but the remainder of the week will feature loads of deals.

The negotiated calendar will be led by the New York City Transitional Finance Authority, which is set to sell $800 million in series 2010 future tax secured bonds on Thursday, said a sales calendar. Retail order periods will be conducted Tuesday and Wednesday.

The bonds (Aa2/AAA/AA+) will be sold through lead manager Goldman, Sachs & Co.

The deal includes $140 million in series 2010C-1 tax-exempt subordinate bonds and $660 million in series 2010C-2 taxable subordinate Build America Bonds. Both tranches are due 2011 to 2031.

Proceeds will be used to fund general city capital expenditures.

Washington's $500 million deal ahead

Also coming up, the State of Washington is set to bring to market $500 million in series 2010D motor vehicle tax general obligation Build America Bonds on Wednesday, said a preliminary official statement.

The bonds (Aa1/AA+/AA) will be sold through senior managers J.P. Morgan Securities Inc. and Goldman Sachs.

The bonds are due 2034.

Proceeds will be used to fund state and local highway improvements.

In other upcoming deals, the Dormitory Authority of the State of New York is set to price $369.615 million in series 2009 revenue bonds for the Mount Sinai School of Medicine on Thursday, said a preliminary official statement.

The bonds (A3/A-/) will be sold on a negotiated basis with JPMorgan and Goldman Sachs as the senior managers.

The bonds are due 2017 to 2024 with term bonds due 2029, 2034 and 2039.

Proceeds will be used to finance and construct facilities for the school.

Secondary stays quiet, weakens

In the secondary market, yields were higher by a couple of basis points across the yield curve.

Amid the light trading action, the Cascade Water Alliance of Washington state's recently priced Build America Bonds were seen moving. The 5.668% 2029 bonds were seen at 5.667%.

Elsewhere, American Municipal Power Inc. of Ohio's series 2009B straight taxable revenue bonds were seen in action. The 3.815% 2014 bonds were seen at 3.35%.

In other trading news, the bonds issued by the Washington Health Care Facilities Authority for PeaceHealth were seen moving. The 4.5% 2028s were trading at 4.45%.

Also in the health-care sector, the North Shore Long Island Jewish Medical Center's 5.5% 2037 revenue bonds were trading at 4.997%.

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