Municipal bond yields continue to slide; Wisconsin sells $800 million in operating notes

By Sheri Kasprzak

New York, June 15 - Municipal yields once again took a hit Tuesday after stocks rallied and Treasuries continued to get pinched, said a trader reached in the afternoon.

"It's not as bad as yesterday, but yields are still up by 1 or 2 bps," said the trader.

"Trading [volume] is up a bit. It's better than it has been the past few weeks, so that's a plus," the trader said.

The Louisiana State University and Agricultural and Mechanical College's recently priced series 2010A revenue bonds were moving Tuesday. The 3% 2017 bonds were trading with a 3.001% yield.

In the primary market, the State of Wisconsin led a heavy day of activity with its $800 million sale of series 2010 operating notes, said David Erdman of the Wisconsin Department of Administration Capital Finance Office.

The notes (MIG1//F1+) were sold competitively. Goldman Sachs & Co.; Citigroup Global Markets Inc.; J.P. Morgan Securities Inc.; Wells Fargo Bank, NA; TD Securities; and Piper Jaffray & Co. all took pieces of the notes.

The 2% notes are due June 15, 2011 and have a net interest cost of 0.5076%, said Erdman. In reoffering, the notes were seen moving between 0.47% and 0.51%.

A sellsider connected to the offering told Prospect News that the notes are a routine offering for the state, and the state is expected to use the proceeds to finance required disbursements for the 2010-2011 fiscal year. The state makes disbursements to local governments throughout the fiscal year.

L.A. school bonds price

Elsewhere, the Los Angeles Unified School District priced $540 million in series 2010-11 tax and revenue anticipation notes, according to a term sheet.

The 2% notes are due June 30, 2011 and were not reoffered.

Bank of America Merrill Lynch and Piper Jaffray were the lead managers.

Proceeds will be used to finance capital requirements and the district's workers' compensation fund ahead of the collection of taxes and revenues.

Dallas water bonds sold

In other pricing news, the City of Dallas priced $291 million in series 2010 waterworks system revenue refunding bonds, according to a pricing sheet.

The bonds (Aa1/AA/) were sold through Siebert Brandford Shank & Co. LLC.

The bonds are due 2011 to 2030 with term bonds due 2035 and 2039. Coupons range from 2% to 5%. The 2035 bonds have a 5% coupon, and the 2039 bonds have a 5% coupon. Neither of the term bonds was reoffered.

Proceeds will be used to refund existing waterworks revenue bonds.

Texas authority preps deal

Coming up, the Texas Public Finance Authority is expected to price $341.47 million in series 2010 general obligation refunding bonds, according to a preliminary official statement.

The offering includes $190.71 million in series 2010A bonds and $150.76 million in series 2010B bonds.

The bonds (Aaa/AA+/AAA) will be sold through senior manager Barclays Capital Inc.

The 2010A bonds are due 2010 to 2029 with a term bond, the maturity date of which has not been set. The 2010B bonds are due 2010 to 2029 with a term bond, the maturity date of which has not been set.

Proceeds will be used to refund a portion of the authority's outstanding commercial paper notes and outstanding G.O. bonds.

The authority, based in Austin, Texas, was formerly known as the Texas Public Building Authority. The authority constructs or acquires state office buildings.

Broward sets sale

Also ahead, Broward County in Florida plans to price $228.78 million in series 2010 half-cent sales tax revenue bonds, according to a preliminary official statement.

The offering includes $40 million in series 2010A bonds, $140 million in series 2010B Build America Bonds and $48.78 million in series 2010C taxable recovery zone economic development bonds.

The bonds (Aa2/AA+/AA+) will be sold on a negotiated basis with Morgan Stanley & Co. Inc. as the senior manager.

Proceeds will be used to construct, acquire and equip a new 20-story courthouse in Fort Lauderdale, Fla.

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