Muni yields close slightly firmer; Chicago releases terms of $1.05 billion airport bond sale

By Sheri Kasprzak

New York, April 27 - Municipals firmed yet again on Wednesday as the trend of light supply continued, said market insiders. Meanwhile, further details of the City of Chicago's $1.048 billion offering of bonds emerged.

"There's not enough [supply] to push us one way or the other," said one trader reached during the session.

"We're firmer, but there are spots where we haven't moved at all."

He said short bonds were better by 2 basis points, as were 30-year bonds. Within that range, yields were unchanged to improved by 1 bp.

Elsewhere, Chicago released the terms of its $1.048 billion sale of series 2011 revenue bonds priced Tuesday for the Chicago O'Hare International Airport.

The offering included $420.155 million of series 2011A general third-lien revenue bonds, $295.92 million of series 2011B general third-lien revenue bonds, $283.925 million of series 2011C general third-lien revenue bonds and $48 million of series 2011A and 2011B passenger facility charge non-AMT revenue bonds.

Bonds repriced

Alan Schankel, managing director with Janney Montgomery Scott LLC, said Wednesday that the bonds were "met with solid demand benefiting from a strong market and little competing supply, with some shorter maturities repriced to lower yields, and the 30-year pricing at 6%."

The 2011A general third-lien bonds are due 2035 and 2039 with a 5.625% coupon and a 5.75% coupon, respectively.

The 2011B general third-lien bonds are due 2014 to 2022 with term bonds due in 2031 and 2041. The serial coupons range from 3% to 5%. The 2031 bonds have a 5.5% coupon priced at 97.76, and the 2041 bonds have a 6% coupon priced at par.

The 2011C general third-lien bonds are due 2031 and 2041 with 5.5% and 6.5% coupons, respectively.

The 2011A passenger facility charge bonds are due 2018 to 2019 with a term bond due in 2032. The serial bonds have 5% coupons, and the 2032 bonds have a 5.625% coupon priced at 98.729. The 2011B passenger facility charge bonds are due 2017 to 2018 with 5% coupons. The bonds also feature a term bond due in 2033 with a 6% coupon priced at 96.47.

Citigroup Global Markets Inc. and Siebert Brandford Shank & Co. LLC were the lead managers for the offering.

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

MEAG deal ahead

Looking to Thursday's primary calendar, the Municipal Electric Authority of Georgia is set to bring $178.105 million of series 2011 subordinated bonds through Morgan Stanley & Co. Inc.

The offering includes $82.43 million of series 2011A project one subordinated bonds, $31.085 million of series 2011B project one subordinated bonds, $1.085 million of series 2011C taxable project one subordinated bonds, $5.785 million of series 2011A general resolution project subordinated bonds, $55.77 million of series 2011B general resolution project subordinated bonds and $1.95 million of series 2011C taxable general resolution project subordinated bonds.

Proceeds will be deposited into a construction fund for a variety of capital improvements.

MEAG is based in Atlanta.

Connecticut plans offering

Out on the horizon, the State of Connecticut announced plans Wednesday to bring to the table $353.085 million of series 2011 general obligation bonds, said a preliminary official statement.

The offering includes $337.62 million of series 2011A Sifma index G.O. bonds and $15.465 million of series 2011A taxable G.O. bonds.

The 2011A Sifma bonds are due 2012 to 2018, and the 2011A taxable bonds are due May 18, 2012.

Morgan Stanley and Siebert Brandford Shank are the senior managers.

Proceeds will be used to retire existing bond anticipation notes.

Mobile authority preps sale

Also coming up, Alabama's Mobile Downtown Redevelopment Authority is expected to price $225 million of series 2011 Gulf Opportunity Zone revenue bonds for Austal USA LLC, said a preliminary official statement.

The deal includes $112.5 million of series 2011A bonds and $112.5 million of series 2011B bonds.

The bonds will be sold through Merrill Lynch and Thornton Farish Inc.

Both bonds are due May 1, 2041.

Proceeds will be used to finance the construction and equipment of a modular manufacturing facility for Austal's shipbuilding operations. The project will expand the company's current operation in Mobile.

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