Munis close out week flat as market awaits coming supply; Georgia to bring $997.76 million

By Sheri Kasprzak

New York, June 17 - Municipals closed out an otherwise strong week on a flat note, said traders, as the market waits for the coming week's primary supply and an indication of how investors will digest the supply.

The deal that will set the tone for the week will be a $997.755 million sale of series 2011 general obligation bonds and G.O. refunding bonds from the State of Georgia.

One trader reached Friday said the deal is likely to price well given the Peach State's solid credit ratings, low debt levels and strong economy.

"I think they'll do fine," said the trader.

"With their credit rating, competitive should be a good way to go. It's a strong credit. They don't come to market too often, but they've done pretty well historically."

Deal has seven tranches

The Georgia deal is set to price competitively on Tuesday. The offering will be conducted in seven tranches: $39.105 million of series 2011A G.O. bonds, $28 million of series 2011B G.O. bonds, $412.51 million of series 2011C G.O. bonds, $77 million of series 2011D federally taxable qualified school construction G.O. bonds, $69.7 million of series 2011E-1 refunding G.O. bonds, $245.69 million of series 2011E-2 refunding G.O. bonds and $125.75 million of series 2011F refunding G.O. bonds.

The proceeds from the deal will be used to construct, develop, improve, expand or enlarge land, water, property, buildings and other state facilities, to provide educational facilities for county and independent school systems within the state and to refund the state's series 2006H bonds.

State sold G.O.s in October

Lee McElhannon, director of bond finance for the state, told Prospect News back in October that the state typically conducts is bond sales competitively, but it has done a few negotiated sales.

In October, the state priced $653.925 million of series 2010 G.O. bonds in a competitive sale.

That deal included $170.165 million of series 2010B G.O. bonds, $360.4 million of series 2010C-1 Build America Bonds, $94.605 million of series 2010C-2 Build America Bonds and $28.755 million of series 2010C-4 qualified school construction bonds.

The 2010B, 2010C-1, 2010C-2 and 2010C-3 bonds were all won by Citigroup Global Markets Inc., and the 2010C-4 bonds were won by Barclays Capital Inc.

The 2010B bonds are due 2011 to 2020 with 2% to 5% coupons. The 2010C-1 bonds are due 2011 to 2016 with 3% to 5% coupons, and the 2010C-2 bonds are due 2017 to 2030 with 2.58% to 4.565% coupons, all priced at par. The 2010C-3 bonds are due 2013 to 2030 with 1.19% to 4.67% coupons, all priced at par, and the 2010C-4 bonds are due Oct. 1, 2029 with a 4.55% coupon priced at par.

Citizens Property deal set

Another larger offering set to come later in the month is a $900 million deal from the Citizens Property Insurance Corp. of Florida.

During the week of June 27, the corporation is expected to sell the series 2011A coastal account senior secured bonds through Citigroup.

The offering will help the company meet its claim-paying needs for the 2011 hurricane season for its coastal accounts.

Based in Jacksonville, Citizens is a government-run insurance company created to provide residential and commercial property insurance to certain properties in Florida.

New York Thruway drives notes

Also coming up, the New York State Thruway Authority is set to come to market with $880.61 million of series 2011A general revenue bond anticipation notes through RBC Capital Markets LLC and Loop Capital Markets LLC.

The notes are due July 12, 2012.

Proceeds will be used to fund a portion of the authority's multi-year capital plan and refund its series 2009A general fund BANs.

L.A. County brings TRANs

Elsewhere, Los Angeles County, Calif., sold $1.3 billion of series 2011-12 tax and revenue anticipation notes, said a pricing sheet.

The offering included $300 million of series 2011-12A notes, $500 million of series 2011-12B notes and $500 million of series 2011-12C notes.

The 2011-12A notes are due Feb. 29, 2012 and have a 2.5% coupon priced at 101.438. The 2011-12B notes are due March 30, 2012 and have a 2.5% coupon priced at 101.609. The 2011-12C notes are due June 29, 2012 and have a 2.5% coupon priced at 102.08.

J.P. Morgan Securities LLC was the senior manager.

Proceeds will be used to finance cash flow requirements ahead of the collection of taxes and revenues.

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