Municipals firm on the long end; Manchester, N.H., brings $90 million in airport revenue bonds

By Sheri Kasprzak

New York, Dec. 8 - Municipals were mostly unchanged on Tuesday with the long end seen firmer by a couple of basis points, a trader reached during the day reported.

"Most of the yield curve is flat," the trader said. "Out on the long end, there's some improvement. Yields are down by about 2 or so basis points."

Meanwhile, one market insider said he feels this will be the last real week of decent new issue supply ahead of the holiday season.

"Seems like this might be the last week of substantial issuance in the muni market, and there is some heavy lifting going on," said Anthony Shields, a vice president with Grigsby & Associates, Inc.

"Short end getting very steamy, but there is still good interest out to 10 years. The belly (10-20 years) is where there is some trepidation, but with the year-end roll approaching, that will not be a hurdle. Looks like smooth sailing into year-end."

Manchester, N.H., prices bonds

Amid Tuesday's action was a $90 million sale of series 2009 general airport revenue bonds from Manchester, N.H.

The bonds (A2/A-/A) were sold through senior managers Citigroup Global Markets Inc. and J.P. Morgan Securities Inc.

The deal included $65 million in series 2009A refunding bonds and $25 million in series 2009B refunding bonds.

A sellside source reported that the 2009A bonds are due 2011 to 2021 with term bonds due 2024 and 2030. The bonds have coupons from 3% to 5.125% with yields from 2% to 5.2%. The 2009B bonds are due 2011 to 2015 with 5% coupons and yields from 2% to 3.57%.

Proceeds will be used to refund existing bonds issued for the Manchester-Boston Regional Airport.

NY Muni Bond Bank deal ahead

Looking out on the horizon, the State of New York Municipal Bond Bank Agency plans to sell $189.29 million in series 2009 recovery act bonds, said a preliminary official statement.

The sale includes $50.4 million in series 2009A bonds, $33.169 million in series 2009B bonds and $105.721 million in series 2009C bonds.

The bonds will be sold on a negotiated basis with Jefferies & Co. as the lead manager.

The 2009A-1 tax-exempt bonds are due 2010 to 2020. The 2009A-2 Build America Bonds are due 2013 to 2019 with a term bond due 2024. The 2009A-3 recovery zone bonds are due 2024 and 2029.

The 2009B-1 tax-exempt bonds are due 2010 to 2029 with a term bond due 2035. The 2009B-2 Build America Bonds are due 2029 and 2033. The 2009B-3 recovery zone bonds are due 2035.

The 2009C-1 tax-exempt bonds are due 2011 to 2023. The 2009C-2 Build America Bonds are due 2013 to 2019 with a term bond due 2028. The 2009C-3 recovery zone bonds are due 2029.

Proceeds from the sale will be used to distribute funds to local municipalities for various uses.

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