Yields continue to weaken as Treasuries get hammered; Citizens Property brings $956.16 million

By Sheri Kasprzak

New York, June 30 - Municipals continued to weaken on Thursday following in line with Treasuries as the Greek government worked to resolve its financial woes, said market insiders.

The losses were not quite as bad compared to the weakness seen earlier in the week, said one trader.

Yields were up by 1 to 3 basis points across most of the curve, with bonds past 30 years seeing some slight improvement, noted one trader reached during the day.

"We're just sliding along," he said when asked about munis following the Treasury market.

"New issue pricings seem to be doing OK. We're not as weak [as Treasuries], but we're awfully close."

The five- and seven-year Treasury notes were off by 7 bps on Thursday, and the 10-year was off by almost 5 bps.

Citizens sells $956.16 million

Heading up the day's primary action, the Citizens Property Insurance Corp. out of Florida brought $956.16 million of series 2011A coastal account senior secured bonds, said a pricing sheet.

The yields were down 5 bps from initial pricing, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

The offering included $701.16 million of series 2011A-1 bonds, $105 million of series 2011A-2 bonds and $150 million of series 2011A-3 floating-rate bonds.

The 2011A-1 bonds are due 2015 to 2020 with 3.25% to 5% coupons. The 2011A-2 bonds are due June 1, 2012 and have a 2% coupon priced at 101.183. The 2011A-3 bonds are due June 1, 2014.

The bonds were sold through senior manager Citigroup Global Markets Inc.

Proceeds will be used to help Citizens meet its claim-paying needs for the 2011 hurricane season for its coastal account.

L.A. sanitation bonds price

Elsewhere, the Los Angeles County Sanitation Districts Financing Authority priced $128.34 million of series 2011 capital projects senior ad valorem obligation bonds, said a pricing sheet.

The bonds (Aa1/AA+/) were sold through Bank of America Merrill Lynch.

The bonds are due 2014 to 2023 with 2.5% to 5% coupons.

Proceeds will be used to refund and defease the authority's series 2003 bonds.

Georgia G.O. yields up 14 bps

Over in the secondary market, Schankel reported Thursday that yields on the State of Georgia's $997.755 million of series 2011 general obligation bonds and G.O. refunding bonds priced earlier this month were seen as much as 14 bps above original issuance levels.

The state sold $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 G.O. refunding bonds, $245.69 million of series 2011E-2 G.O. refunding bonds and $125.75 million of series 2011F G.O. refunding bonds.

The 10-year bonds were priced to yield 2.63%, which is in line with highly rated tax-exempts.

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

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