Municipals stay unchanged; California springs $750 million Build America Bonds sale on market

By Sheri Kasprzak

New York, Nov. 2 - Municipals ended Monday flatter as market participants prepare for another healthy new issue calendar, traders reported.

One trader reached in the afternoon said yields were fairly flat with a little volume, especially for longer bonds.

"What's trading today is mostly long," she said.

"There's really very little movement. We're mostly flat overall. I would be very surprised if secondary makes any ground at all this week because so much is going on over in primary."

Another trader agreed.

"We're unchanged. It really is going to be all about primary [this week]," the trader said.

Amid the light trading action Monday, the revenue bonds sold for Catholic Health Care West by the Colorado Health Facilities Authority were moving. The 5.125% 2034 bonds were seen at 4.75%.

Elsewhere, the Pennsylvania State Turnpike Authority's 5.125% series 2009D bonds were trading at par.

Meanwhile, the State of California dropped a $750 million Build America Bonds bomb on the marketplace Monday.

Tom Dresslar, spokesman for the state treasurer's office, said late Monday afternoon that the state had received an inquiry and would be selling the bonds in a public offering Tuesday.

The news confused some market insiders.

"I didn't know anything about it before today," one sellside source said.

"It does seem odd. I'm not sure what they mean by an inquiry. I guess we'll see how it comes out tomorrow."

The proceeds will finance infrastructure projects.

Dresslar said the 30-year bonds will be sold on a negotiated basis with Citigroup Global Markets Inc. as the senior manager.

Georgia sale coming up

On Tuesday, the State of Georgia is also coming to market with $700 million in series 2009 general obligation bonds through Goldman, Sachs & Co.

The deal includes $85.48 million in series 2009F bonds, $114.52 million in series 2009G bonds, $400 million in series 2009H Build America Bonds and $100 million in series 2009I G.O. refunding bonds.

Proceeds will retire existing debt and fund capital projects.

NYU sale expected for Wednesday

Also ahead this week, the Dormitory Authority of the State of New York is scheduled on Wednesday to price $460 million in series 2009 revenue bonds for New York University, said a preliminary official statement.

The bonds (Aa3/AA-/) will be sold through senior manager Morgan Stanley & Co. Inc.

The sale includes $400 million in series 2009A bonds and $60 million in series 2009B bonds.

The 2009A bonds are due 2015 to 2029 with a term bond due 2039. The 2009B bonds are also due 2015 to 2029 with a term bond due 2039.

Proceeds will be used to renovate and equip an academic building to house the mathematics and computer science programs, renovate an academic building to house the linguistics program, reconstruct the biological sciences building, renovate the school bookstore and renovate a mixed-use building.

Buffalo schools sale ahead

Out on the horizon, the Erie County Industrial Development Authority of New York is set to sell $294 million in series 2009A school facility revenue bonds for the City School District of Buffalo, said a preliminary official statement.

The bonds (A1/AA-/) will be sold through lead manager Citigroup Global Markets.

The bonds are due 2011 to 2031.

Proceeds will be used to reconstruct existing schools and construct new school facilities in the City of Buffalo.

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