King County, Wash., prices $250 million in sewer bonds; munis slightly weaker in quiet session

By Aaron Hochman-Zimmerman and Sheri Kasprzak

New York, July 27 - Monday proved to be another quiet session for municipals, as King County, Wash., led the light primary action.

One trader reached Monday said that the longer end of the yield curve was seen weaker with the shorter end of the curve off only a couple of basis points. Trading volume remained fairly light, she noted.

"I'm expecting things to pick up as the week goes on," she said. "We're looking a little weaker today. Treasuries are off again, so we seem to be sliding along with them. From what I've seen so far, yields are up maybe 2 or 3 basis points, especially long."

The session was "as quiet as can be," another trader said, adding that the day made it almost impossible to determine the market's direction in the short term.

The coming week feels as though it may continue the pattern of silent Mondays and Fridays, the senior trader said.

"We've had a lot of those this summer," he said.

The end of the month, the trader said, may create a flurry of trading even before Thursday.

"[In recent sessions], people are looking for anything with a little bit of yield to it," he said, but in his shop, which focuses on the Midwest, "we're trying to find business on the wholesale side."

Going forward into August, the appetite will likely continue, but perhaps at a slower pace, he said.

The dog days are typically slow for markets, but some "have done something we didn't expect them to," he said.

The difference is that the risk generally stays light while the "A-team players" are on vacation, he said.

"If it's a B-team guy on a desk, he's probably not going to take as much risk," he added.

King County sells $250 million

In the primary market, King County in Washington State priced Monday $250 million in series 2009 sewer revenue bonds, said a pricing wire released by a sellside source.

The full details were still being hammered out Monday afternoon.

The bonds (/AA+/) were sold through Barclays Capital Inc.

The bonds are due 2013 to 2034 with term bonds due 2039 and 2042. The coupons range from 4% to 5.25%.

Proceeds will be used to fund improvements to the county's sewer system.

Philadelphia G.O.s to come

In Tuesday's offerings, the City of Philadelphia plans to price $240.755 million in series 2009A general obligation fixed-rate refunding bonds.

The bonds (Baa1/BBB/BBB+) will be sold through Merrill Lynch & Co., and the bonds are due 2010 to 2031.

Proceeds will be used to refund the city's series 2007B bonds.

The week's largest sale comes to market on Wednesday from the Indianapolis Local Public Improvement Bond Bank. The bond bank will price $568.715 million in series 2009A waterworks bonds (A3/AA-/A-).

Morgan Stanley & Co. Inc. is the senior manager.

The bonds are due 2011 to 2024 with term bonds due 2029 and 2038.

Proceeds will be used to refund the bond bank's series 2004A, 2005G and 2005H bonds as well as make a deposit to a reserve fund.

Trading action quiet

Moving to the secondary market, trading was seen as light with some weakness, especially on the long end of the yield curve. Yields were seen up by about 3 bps on the long end and up a basis point or two on the short end.

One trader said he saw lots of action for Campbell County, Wyo.'s series 2009A revenue bonds priced for the Basin Electric Power Cooperative. The 5.75% 2039 bonds were seen at 5.357% on Monday. The bonds priced Tuesday at par.

Elsewhere, the Louisiana Public Facilities Authority's revenue bonds sold for the Franciscan Missionaries of Our Lady of Lourdes were also moving. The 6.375% 2030 bonds were seen at 6.21% Monday afternoon.

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