Muni yields close out week on sour note; San Diego Community College brings $364.33 million

By Sheri Kasprzak

New York, July 8 - Municipal yields finished off a volatile week on a down note, with yields off by 2 basis points to 3 bps across the curve, market insiders said. Lackluster employment data sent Treasuries lower on Friday, and municipals followed along, said one trader.

"It's data-fueled mostly. We're probably off 2 to 3 [bps] all over," said the trader.

The market struggled through the week with lower-than-usual supply and a weak Treasury market.

Even so, the week ahead will offer up a healthier new issue calendar. Alan Schankel, managing director with Janney Montgomery Scott LLC, said $5.5 billion is expected to come down the pipeline.

Schankel said Friday in a report that the muni yield curve is still very steep. The five- to 30-year slope now trades at 308 bps, compared with 263 bps for Treasuries.

"The yield differential between maturities in each year from three to eight years is 30 bps or higher, an unusually wide maturity spread," he wrote.

San Diego college bonds price

Heading up the primary action, the San Diego Community College District sold $364.335 million of series 2011 general obligation bonds, said a pricing sheet.

The offering included $22.23 million of series 2011 G.O. refunding bonds, $83.55 million of series 2011 election of 2002 G.O. bonds, $16.45 million of series 2011 election of 2002 capital appreciation bonds and $242.105 million of series 2011 election of 2006 G.O. bonds.

The 2011 G.O. refunding bonds are due 2012 to 2023 with 2% to 5% coupons. The 2011 election of 2002 G.O. bonds are due 2012 to 2025 with 1.5% to 5% coupons. The 2011 election of 2002 capital appreciation bonds all have 0% coupons. The 2011 election of 2006 bonds are due 2012 to 2031 with term bonds due in 2036 and 2041. The serial coupons range from 1.5% to 5%. The 2036 bonds have a 5% coupon priced at 101.575, and the 2041 bonds have a 5% coupon priced at 101.099.

The bonds (Aa1) were sold through RBC Capital Markets LLC.

Proceeds will be used to fund capital improvements to the district's community college facilities.

Dasny deal leads calendar

Heading up the coming week's primary offerings, the Dormitory Authority of the State of New York is poised to price $762.715 million of series 2011 state personal income tax revenue bonds Wednesday, said a preliminary official statement.

The offering includes $717.945 million of series 2011C tax-exempt bonds and $44.77 million of series 2011D taxable bonds.

The bonds (/AAA/AA) will be sold through Wells Fargo Securities LLC and Barclays Capital Inc.

Proceeds will be used to finance capital projects at the State University of New York and to fund grants under the Expanding Our Children's Education and Learning program.

Colorado TRANs on the table

Another major deal in the week ahead comes out of the Centennial State. Colorado is gearing up to bring $500 million of series 2011A general fund tax and revenue anticipation notes on Tuesday, said a notice of sale.

The notes (MIG 1/SP-1+/) will be sold competitively with Stifel, Nicolaus & Co. Inc. as the financial adviser.

The notes are due June 27, 2012.

Proceeds will be used to finance general fund requirements during the coming fiscal year ahead of the collection of certain taxes and revenues.

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