Municipals end flat to firmer ahead of $12 billion new issues; New York utility bonds to price

By Sheri Kasprzak

New York, Dec. 9 - Municipals were flat to firmer ahead of the new crop of offerings slated to hit the market this week. New offerings are expected to total about $12 billion, led by two offerings that top $2 billion.

The market followed along with slightly firmer Treasuries, said one trader. The firmness was mostly felt out long, he noted.

Looking to the coming deals, the Foothill/Eastern Transportation Corridor of California is set to price $2,259,586,376.20 of series 2013 toll road revenue refunding bonds in seven tranches on Thursday. The offering was delayed from last week.

The bonds (Ba1/BBB-/BBB-) will be sold through Barclays and Goldman Sachs & Co.

Proceeds will be used to refund the agency's series 1999 revenue bonds.

Utility Debt offering set

Another offering for the week that exceeds $2 billion is from the Utility Debt Securitization Authority of New York, which plans to price $2,085,000,000 of series 2013 restructuring bonds.

The deal includes $485 million of series 2013T taxable bonds and $1.6 billion of series 2013E tax-exempt bonds.

The bonds will be sold through Goldman Sachs and Morgan Stanley & Co. LLC.

Proceeds will be used to retire existing debt.

New York preps G.O. bonds

Also set to hit the active primary market this week, the City of New York will price $700 million of series 2013G-H general obligation bonds through Jefferies & Co.

The bonds, which are due 2014 to 2033, will be used to redeem existing G.O. debt, and pricing is expected on Tuesday.

Illinois deal to price

Another highly anticipated offering for the week comes from the State of Illinois, which is set to price $350 million of series 2013 December 2013 taxable G.O. bonds on Thursday.

The deal comes on the heels of the passage of some pension reform legislation in the state that could save the state a substantial amount of money by raising the retirement age for some state employees and other changes. Some insiders have noted that this legislation could have a positive impact on the pricing terms of Thursday's offering.

The bonds will be sold competitively and are due 2014 to 2038.

Proceeds will be used to finance capital projects in the state, including school construction and transportation projects.

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