Munis close out week flat to firmer; Chicago preps $998.86 million airport sale for Wednesday

By Sheri Kasprzak

New York, Jan. 28 - Municipals were largely unmoved in a quiet day of trading, market insiders reported. Meanwhile, the market is gearing up for a couple of substantial offerings in the coming week.

"If there's any movement at all, it's probably out long," said one trader.

"Yields past 30 years might be better by a basis point or two. Otherwise, I'd call it flat. It's been really quiet. There's some trading going on, but just bits here and there."

The news has been largely good in the broad municipals market, according to J.R. Rieger, vice president of fixed-income indexes at Standard & Poor's.

Rieger wrote in a report released Friday that munis have enjoyed seven straight sessions of "modest upward movement earning back 1% in total return."

"The baby hasn't been thrown out with the bath water," Rieger wrote.

"Yields have come down 10 bps from their high point on Jan. 18. However, bond fund outflows and differing perspectives on the prospects for municipal defaults remain high profile."

Rieger noted that even though the market has experienced a week of positive movement, yields remain higher than where they started the year, but interest rates are higher in general.

Georgia Tech brings bonds

Amid light primary activity on Friday, the Development Authority of Fulton County in Georgia sold $88.775 million of series 2011 revenue bonds for the Georgia Tech Athletic Association, said a pricing sheet. The deal was cut from $97.9 million.

The bonds (A1//A+) were sold through Bank of America Merrill Lynch.

The bonds are due 2011 to 2031 with term bonds due 2036 and 2041. Serial coupons range from 2% to 5.75%. The 2036 bonds have a 5.75% coupon priced at 96.998, and the 2041 bonds have a 5.75% coupon priced at 96.104.

Proceeds will be used to finance improvements to Georgia Tech athletic facilities, including renovations to its basketball arena, the construction of an indoor football practice facility and other improvements, as well as to refund the association's series 2008A bonds.

The Georgia Institute of Technology is located in Atlanta.

Chicago to fly deal

Looking to the coming week's offerings, the City of Chicago will headline with its planned $998.855 million sale of series 2011 passenger facility charge revenue bonds set for pricing Wednesday.

The offering includes $417.04 million of series 2011A passenger facility charge non-AMT revenue bonds, $43.58 million of series 2011B passenger facility charge non-AMT revenue refunding bonds, $127.065 million of series 2011C passenger facility charge AMT revenue refunding bonds and $411.17 million of series 2011A grant receipts and subordinate-lien passenger facility charge revenue bonds.

The bonds will be sold through senior managers Citigroup Global Markets Inc. and Siebert Brandford Shank & Co. LLC.

Proceeds will be used to make capital improvements at the airport, refund grant anticipation bonds and commercial paper notes as well as make debt service payments.

San Joaquin deal set

Moving to the West Coast, the San Joaquin County Transportation Authority of California plans to price $211.785 million of series 2011A Measure K sales tax revenue bonds, said a preliminary official statement.

The bonds (Aa3/AA/) will be sold on a negotiated basis with J.P. Morgan Securities LLC as the senior manager.

The bonds are due 2014 to 2031 with term bonds due 2036 and 2041.

Proceeds will be used to finance transportation construction projects, defease all of the authority's outstanding series 2008 commercial paper notes and fund the authority's debt service requirements.

Based in Stockton, the authority provides transportation plans for a seven-city region within the county and funds necessary repairs and upgrades to the system.

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