Municipals improve as larger issues hit market; New York State Thruway prices $524.22 million

By Sheri Kasprzak

New York, Aug. 22 - After a tough start to the week, municipal yields were improved on Wednesday as some of the larger deals of the week hit the market, said traders.

Even so, munis just couldn't keep up with Treasuries.

"Treasuries are stronger, so we're getting some help from that, but we're still underperforming [Treasuries]," a trader said.

"Lots of the week's bigger deals are coming, and that's helping set the tone a bit."

Treasuries got a boost Wednesday after the Federal Reserve announced that further economic stimulus is available from the U.S. central bank.

New York Thruway bonds price

In primary action Wednesday, the New York State Thruway Authority priced $524.22 million of series 2012A state personal income tax revenue bonds, said a pricing sheet.

The bonds (/AA/AA) were sold through J.P. Morgan Securities LLC and M.R. Beal & Co. LLC.

The bonds are due 2013 to 2032 with 2% to 5% coupons.

The offering, according to Alan Schankel, managing director with Janney Montgomery Scott LLC, was finalized with yields as much as 7 basis points lower than the retail order period.

Proceeds will be used to make grants to reimburse local municipalities for highway, bridge and multimodal projects and to fund Metropolitan Transportation Authority projects.

Texas notes saw robust bidding

Meanwhile, the State of Texas' $9.8 billion sale of series 2012 tax and revenue anticipation notes saw a good deal of bidding action, Schankel said Wednesday.

"The notes, which mature in August 2013, sold at a yield of 0.23%," Schankel said.

"This contrasts to California, which last week sold $10 billion of slightly shorter notes with yields of 0.33% for the May maturity and 0.43% for June's."

The Texas notes (MIG 1/SP-1+/F1+) were sold competitively on Tuesday.

J.P. Morgan Securities LLC won $5.22 billion of the notes. Citigroup Global Markets Inc. won $2 billion of the notes, Bank of America Merrill Lynch won $1.05 billion, and Wells Fargo Securities LLC took $1 billion. RBC Capital Markets LLC took $325 million, and Piper Jaffray & Co. won $100 million. Goldman Sachs & Co. won $80 million, and Morgan Stanley & Co. LLC took $25 million.

The weighted average net interest cost came in at 0.22529938776%.

The notes are due Aug. 30, 2013, bear interest at 2.5% and priced at 102.262.

Proceeds will be used to finance capital expenditures for the state ahead of the collection of taxes and revenues during the 2012-2013 fiscal year.

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