Municipal bonds end flat to firmer; $5.4 billion TRANs offering from Texas set for Tuesday

By Sheri Kasprzak

New York, Aug. 25 – Municipals rounded out the slow Monday session mostly unchanged with some firmness seen in longer maturities, said a trader during the afternoon. With the Labor Day weekend ahead, supply is expected to be light, and secondary action will likely remain subdued as well, insiders noted.

Despite some firmness seen in Treasuries during the day, municipals held steady ahead of a smaller supply of new issues.

Demand remains strong. Investment Company Institute data revealed positive flows to municipal mutual funds totaling $897 million for the week of Aug. 13.

Looking to this week’s supply, activity is expected to decrease substantially ahead of the Labor Day holiday, market insiders said. Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC, has about $3.1 billion of new issues on his calendar with $1.4 billion as negotiated offerings and the remainder coming as competitive deals.

Texas notes ahead

Despite Kozlik’s estimate, Texas is still on tap to price $5.4 billion of tax and revenue anticipation notes on Tuesday.

The 2014 TRANs (MIG 1) will be sold competitively.

The notes are due Aug. 31, 2015.

Proceeds will be used to finance capital expenditures for the coming fiscal year.

Virginia building bonds set

Among the other competitive offerings slated for the week, the Virginia Public Building Authority is scheduled to bring to market $467.77 million of series 2014 revenue bonds (Aa1/AA+/AA+) on Wednesday.

The offering includes $129.17 million of series 2014A public facilities revenue bonds, $29,215,000 of series 2014B taxable bonds and $309,385,000 of series 2014C refunding bonds.

Proceeds will be used to finance the construct, improvement, reconstruction and equipment of public facilities used by the commonwealth, including jails and juvenile correctional facilities.

Austin preps deal

Leading the negotiated calendar for the week, the City of Austin is slated to price $160.87 million of series 2014 public improvement bonds and certificates of obligation (Aaa/AAA/AAA).

The deal includes $104.62 million of series 2014 public improvement bonds, $40.45 million of series 2014 COPs and $15.8 million of series 2014 public property financial contractual obligations.

The bonds will be offered through senior managers Baird & Co. Inc. and Cabrera Capital Markets LLC.

Proceeds will be used to finance capital improvements and purchase equipment or personal property for the city.

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