Yields hold steady as market awaits primary action; Indiana Finance preps $1.02 billion sale

By Sheri Kasprzak

New York, Aug. 15 - The muni market got off to a sleepy start on Monday, with yields little changed, as investors waited to see what the week ahead will bring.

After some volatility in the previous week, investors were taking a more cautious approach to the market on Monday, said one trader.

"It's been rough," he noted.

"Some [investors] are holding back to see what stocks are going to do, maybe take a look at what's coming up on the [primary] calendar. Today has been pretty quiet."

The week ahead will offer up about $5.4 billion of new issuance, about twice the previous week's total, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC.

Two massive offerings will make up the bulk of the new deals coming to market during the week.

Indiana heads up calendar

Heading up the week's action, the Indiana Finance Authority will come to market with $1.021 billion of series 2011 revenue bonds in three tranches.

The deal includes $698.89 million of series 2011A first-lien bonds, $274.2 million of series 2011B second-lien bonds and $47.91 million of series 2011C second-lien bonds.

The bonds will be offered through Morgan Stanley & Co. LLC.

The 2011A bonds are due 2012 to 2026 with term bonds due in 2031 and 2041. The 2011B bonds are due 2014 to 2026 with term bonds due in 2031 and 2041, and the 2011C bonds are due in 2016.

Proceeds will be used to acquire a wastewater system from Citizens Energy Group and to make upgrades to the wastewater system.

California water deal set

Another massive offering is set to price this week. The California Department of Water Resources is gearing up to sell $1 billion of series 2011N power supply revenue bonds on Wednesday through Morgan Stanley and De La Rosa & Co.

The bonds (//AA-) are due 2012 to 2021.

Proceeds will be used to repay the department's series 2002A fixed-rate bonds and outstanding variable-rate bonds.

Louisville sewer bonds planned

Also coming up during the week, the Louisville and Jefferson County Metropolitan Sewer District of Kentucky is scheduled to bring to market $266.98 million of series 2011A sewer and drainage system revenue bonds (Aa3/AA-/AA-) on a competitive basis.

The bonds are due 2012 to 2034.

Proceeds will be used to refund the district's series 1998A and 2001A sewerage and drainage system revenue bonds.

King County deal set

Looking out on the horizon, King County in Washington announced plans on Monday to bring $403.04 million of series 2011B sewer revenue and refunding bonds (Aa2/AA+/) through J.P. Morgan Securities LLC.

The bonds are due 2012 to 2033 with term bonds due in 2041 and 2051.

Proceeds will be used to fund improvements to the county's sewer system and to refund the county's series 2001 sewer revenue and refunding bonds, series 2002A sewer revenue bonds and series 2002B sewer revenue and refunding bonds.

The county seat is Seattle.

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