Municipals end mixed as new deals price; New York City Municipal Water brings $450.9 million

By Sheri Kasprzak

New York, Sept. 13 - Municipals were a mixed bag on Tuesday as new issuance filtered into the market, said traders.

"Treasuries have been a little wild today, and we're following along. It's hard to get a fix," said one trader.

Yields were seen up or down by a basis point or two across the yield curve, said the trader.

A provision in President Barack Obama's jobs bill that would limit tax-exemption benefits for some investors also got some reaction from the market.

Alan Schankel, managing director with Janney Montgomery Scott LLC, said in a report Tuesday that the jobs bill could lower the tax-exempt benefit of muni bonds for joint filers making more than $250,000 per year, essentially limiting the benefit to 28%, compared with the 35% maximum rate.

Meanwhile, primary action is starting to build, said Schankel, after a serious supply drought.

Schankel noted that about $7 billion of long-term new issues were scheduled to come to market during the week. This excludes the massive $5.4 billion sale of short-term notes expected from the State of California later this week.

New York water bonds price

Heading up Tuesday's primary action, the New York City Municipal Water Finance Authority priced $450.9 million of series 2012AA water and sewer system second-resolution revenue and refunding bonds, said a pricing sheet.

The bonds (Aa2/AA+/AA+) were sold competitively with Citigroup Global Markets Inc. winning the bid. The true interest cost is 4.516%.

The bonds are due 2032 to 2034 with a term bond due in 2044. All of the bonds have 5% coupons. The 2044 bonds have a 5% coupon and priced at 116.53.

Proceeds will be used to fund improvements to the city's water and sewer system and to refund first-resolution bonds.

Puerto Rico GDB sells debt

Elsewhere, the Government Development Bank for Puerto Rico priced $450 million of series 2011C senior notes, said a pricing sheet.

The notes (Baa1/BBB/) were sold through senior manager Citigroup.

The notes are due on Oct. 15, 2012, have a 1% coupon and priced at par.

Proceeds will be used to manage cash-flow needs during the 2012 fiscal year.

Missouri buildings board sells

Also during the session, the Board of Public Buildings of the State of Missouri sold $143.02 million of series 2011A general obligation refunding bonds, said a pricing sheet.

The bonds (Aa1/AA+/AA+) were sold competitively with Citigroup as the winner. The TIC came in at 2.833808%.

The bonds are due 2013 to 2028. The serial coupons range from 1% to 5%.

Proceeds will be used to refund the board's series 2001A, 2003A and 2006A special obligation bonds.

California State leads deals

Leading Wednesday's primary action, California State University is set to sell $245 million of series 2011A system-wide revenue bonds through Barclays Capital Inc. and Loop Capital Markets LLC.

The bonds are due 2012 to 2042, and the proceeds from the sale will be used to finance or refinance the construction, acquisition, equipment and renovation of existing California State University facilities.

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