Yields end unchanged to slightly weaker; Puerto Rico Sales Tax Financing to sell $1.57 billion

By Sheri Kasprzak

New York, June 21 - Municipal yields were largely unmoved to slightly off on Monday in line with slightly weaker Treasuries, said one trader.

"Portions of the yield curve are a little higher today, but on a broader level, it's relatively flat," the trader said.

Amid the secondary action, the State of Illinois' series 2010-4 Build America Bonds were moving. The 5.5% 2019 bonds were seen at 5.253%. The bonds priced Thursday at par. The 7.1% 2035s were seen at 6.827% Monday afternoon after pricing at par.

Elsewhere, the Iowa Finance Authority series 2010 health-care facilities bonds sold recently for Genesis Health System were trading on Monday. The 5% 2020 bonds were trading at 4.734%.

Meanwhile, the week's primary action is stacking up, led by a $1.572 billion offering of bonds (A1/A+/A+) from the Puerto Rico Sales Tax Financing Corp.

"For a Puerto Rico issuer, it's not bad," said one sellsider when asked about the expected reception of the offering. "I expect it to do pretty well."

Janney Montgomery Scott LLC municipal credit analyst Tom Kozlik wrote Monday that the issuer has a better rating than the commonwealth's general obligation bonds, which are rated A3 by Moody's Investors Service and BBB- by Standard & Poor's.

The corporation is set to sell $1.572 billion in series 2010 revenue bonds with Citigroup Global Markets Inc., Bank of America Merrill Lynch, J.P. Morgan Securities Inc. and Wells Fargo Securities LLC as the senior managers.

The offering is comprised of $1.4 billion in series 2010C sales tax first subordinate revenue bonds, $80 million in series 2010D sales tax first subordinate Build America Bonds and $92 million in series 2010E sales tax first subordinate recovery zone economic development bonds.

BATA sale to come

Another billion-dollar offering is slated to price during the week, this one from California's Bay Area Toll Authority.

The authority is set to price $1.7 billion in series 2010 subordinate toll bridge revenue bonds (A1/A+/) on Thursday.

The offering will be conducted through Bank of America Merrill Lynch and Citigroup, and proceeds from the sale will be used to fund the construction of a new east span of the San Francisco-Oakland Bay Bridge.

The authority is based in Oakland, Calif.

Harris County deal planned

Another large offering comes out of the Lone Star State. Harris County, Texas, is set to price $450 million in series 2010 tax anticipation notes competitively on Tuesday with First Southwest Co. as the financial adviser.

The notes are due Feb. 28, 2011.

Proceeds will finance the county's capital requirements ahead of the collection of ad valorem and other taxes.

The county seat is Houston.

N.Y. water bonds ahead

Also on Tuesday, the New York City Municipal Water Finance Authority is scheduled to price $400 million in fiscal 2010 series GG water and sewer second general resolution revenue bonds (Aa2/AA+/AA+) through Morgan Keegan & Co. Inc.

The proceeds from the sale will be used to redeem existing commercial paper notes and finance improvements to the city's water and sewer system.

L.A. TRANs planned

On the horizon, the City of Los Angeles is expected to bring to market $1.2 billion in series 2010 tax and revenue anticipation notes, said a preliminary official statement.

The notes will be sold through senior managers JPMorgan and Bank of America Merrill Lynch. The co-managers are Loop Capital Markets LLC and RBC Capital Markets Corp.

The notes are due March 31, 2011, May 31, 2011 and June 30, 2011.

Proceeds will be used to fund general operating expenses for the 2010-2011 fiscal year.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.