Municipal yields firm; Dallas-Fort Worth International Airport organizes $440.81 million deal

By Sheri Kasprzak

New York, Feb. 10 - Municipals shook off their recent losing streak on Friday and saw some firmness as Treasuries benefitted from turmoil in Europe. Following four consecutive sessions of losses, Treasuries got a much-needed shot in the arm when Europe's finance ministers sent Greece's austerity measures back for deeper budget cuts.

Market insiders noted early in the week that unless there was a significant positive change in Treasuries, municipals would likely slump throughout the week. This came to pass.

Amid trading action Friday afternoon, the University of Colorado's recently priced series 2012A enterprise refunding revenue bonds were moving. The 2% 2020 bonds were seen trading in the afternoon at 1.78%. They priced at the same level on Thursday.

Elsewhere, the City of Cincinnati's series 2012A airport system revenue bonds were trading as well. The 5% 2031s were trading at 4.1% after pricing Thursday at a yield of 4.15%.

The Tarrant Regional Water District of Texas saw its recently priced revenue bonds moving as well. The 5% 2037s were moving Friday evening at 3.35% after pricing Wednesday at 3.45%.

Dallas-Fort Worth to price

One of the larger sales to come to market next week is from the Cities of Dallas and Fort Worth. The cities plan to price $440.81 million of series 2012B non-AMT joint revenue refunding bonds for the Dallas-Fort Worth International Airport.

The timing of the offering is interesting, said Alan Schankel, managing director with Janney Montgomery Scott LLC, because layoffs at American Airlines could have a noticeable impact on the airport's enplanements.

"American and its sub American Eagle account for 85% of DFW enplanements, and the planned closure of a Fort Worth maintenance facility would eliminate 1,200 jobs," Schankel wrote late in the week.

The offering (A1/A+/A+) will be sold through senior managers J.P. Morgan Securities LLC and Bank of America Merrill Lynch.

Proceeds will be used to refund the airport's series 2000A, 2001A, 2002B-C and 2003A bonds.

Puerto Rico preps two tranches

The biggest offering of the week ahead will come from the Puerto Rico Aqueduct and Sewer Authority. The exact breakdown of the two tranches was not immediately available.

The bonds (Baa2/BBB-/BBB-) will be sold through lead manager Bank of America Merrill Lynch.

Proceeds will be used to fund the authority's five-year capital improvement program.

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