Municipals close mostly unchanged; New York City Transitional Finance plans $900 million deal

By Sheri Kasprzak

New York, Nov. 7 - Municipals closed out Monday mostly flat as the market waited for the week's slate of new issues to begin pricing, said traders.

With very little action in the primary and secondary markets, municipals barely budged, one trader said. The one exception, he noted, was at 10 years. Ten-year yields were seen down by nearly 3 basis points.

"We're really waiting to see what happens during the week," he added.

Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC, said in a note Monday that about $7.7 billion of new issuance is expected during the week, despite the fact that the week will be shortened by Veterans Day.

Heading up the action, the New York City Transitional Finance Authority is set to price $900 million of series 2012D future tax secured bonds Wednesday, according to a preliminary official statement.

The deal includes $600 million of series 2012D-1 tax-exempt bonds, $100 million of series 2012D-2 taxable subordinated qualified school construction bonds and $200 million of series 2012D-3 taxable subordinated bonds.

The bonds will be sold on a negotiated basis with Citigroup Global Markets Inc. as the senior manager.

Proceeds will be used to finance general capital expenditures for the city.

The authority was established to fund a portion of the city's capital needs.

North Carolina deal ahead

Looking to the packed competitive calendar, the State of North Carolina will come to market Wednesday with $400 million of series 2011C capital improvement limited obligation bonds, said a preliminary official statement.

The bonds (Aa1/AA+/AA+) will be sold on a competitive basis with First Southwest Co. as the financial adviser.

The bonds are due 2013 to 2032.

Proceeds will be used to fund special projects at several of the state's universities, as well as additions to prisons, libraries and related infrastructure.

San Francisco preps sale

Also on Wednesday, the City and County of San Francisco is prepared to bring to market $368.075 million of series 2011-R1 general obligation refunding bonds, said a preliminary official statement.

The bonds (Aa2/AA/AA-) will be sold on a competitive basis with Backstrom McCarley Berry & Co. LLC and Montague De Rose & Associates LLC as the financial advisers.

The maturity dates have not been set.

Proceeds will be used to refund existing debt.

Hawaii deal on horizon

Looking out on the horizon, the Aloha State plans to hit the market with $1.264 billion of series 2011 G.O. bonds, according to a preliminary official statement.

The State of Hawaii's offering includes $800 million of series 2011DZ G.O. bonds, $382.41 million of series 2011EA G.O. refunding bonds, $2.8 million of series 2011EB G.O. refunding bonds, $56 million of series 2011EC G.O. refunding bonds and $23 million of series 2011ED G.O. refunding bonds.

The bonds will be sold on a negotiated basis with Bank of America Merrill Lynch and Goldman Sachs & Co. as the senior managers.

The 2011DZ bonds are due 2016 to 2031, and the 2011EA bonds are due 2016 to 2023. The 2011EB bonds are due in 2012, and the 2011EC bonds are due in 2013. The 2011ED bonds are due in 2015.

Proceeds from the sale will be used to finance capital expenditures and to refund the state's series 2001CV, 2001CW, 2002CX, 2002CZ, 2003DA, 2003DB, 2004DD, 2004DE, 2005DF and 2006DI G.O. bonds.

Guam to sell debt

In other upcoming offerings, the Government of Guam is prepared to sell $235 million of series 2011A business privilege tax bonds, said a preliminary official statement.

The bonds (/A/A-) will be sold on a negotiated basis with Barclays Capital Inc. as the senior manager.

The bonds are due 2012 to 2042.

Proceeds will be used to pay unpaid income tax refunds plus interest for 2010, to pay for cost-of-living allowances for government employees for 2010 and to pay amounts owed to the Government Retirement Fund for the Guam Department of Education and the Guam Memorial Hospital.

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