Municipal yields close slightly firmer; Houston leads new offerings with $500 million deal

By Sheri Kasprzak

New York, April 23 - Municipals were slightly firmer to close out Monday. They followed in line with Treasuries, market insiders reported, with little trading activity to move the market on its own.

Yields were seen firmer by 1 basis point to 3 bps across the yield curve, said traders reached in the afternoon.

"I think we're riding on last week's activity and the expectations for this week," one trader said.

"Primary volume is still pretty high, and demand has been good enough to absorb what's pricing. Treasuries were also doing pretty well today, and we're following along. Otherwise, it's been quiet for us. Not a lot trading."

Roughly $6.6 billion of new issues are expected this week, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC.

Those offerings will be led by a $500 million sale of series 2012 public improvement refunding bonds from the City of Houston. Jefferies & Co. is the lead manager for the offering, the proceeds of which will be used to refund existing public improvement bonds.

New Jersey EDA bonds set

Tuesday's primary action will be led by a $434.6 million offering of series 2012 school facilities construction refunding bonds from the New Jersey Economic Development Authority.

The deal includes $412,795,000 of series 2012II bonds, which are due 2015 to 2027, and $21,805,000 of series 2012II taxable bonds, which are due March 1, 2014.

The bonds will be sold competitively, and the proceeds will be used to refund existing school construction bonds.

Tuesday will prove to be a big day for competitive offerings, with at least four competitive deals scheduled. Also on Tuesday, the City of Raleigh, N.C., is scheduled to bring $147.6 million of series 2012 general obligation public improvement bonds to market in two tranches.

The offering includes $9 million of series 2012A bonds, which are due 2013 to 2032, and $138.6 million of series 2012B bonds, which are due 2013 to 2032.

Proceeds will finance parks and recreation facilities improvements, land acquisition, street improvements and transportation projects for the city.

Atlanta, L.A. seen trading

In secondary action Monday, the City of Atlanta's series 2012A airport revenue bonds were seen moving. The 4% 2037 bonds were seen at 3.726% after pricing Thursday at 3.781%.

Elsewhere during the trading session, the Municipal Improvement Corp. of Los Angeles' series 2012B real property lease revenue bonds were moving. The 4.5% 2037s were seen at 3.969% after pricing Tuesday at 4.6%.

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