Municipals close mixed; trader sees 'correction' around 10 years; Triborough Bridge prices deal

By Sheri Kasprzak

New York, Jan. 10 - Municipal yields broke a three-session firming trend on Thursday as bonds around 10 years took a softer tone, traders reported.

"Around 10 years, where we've seen a lot of improvement for the past couple of weeks, yields are up a little. It's not a significant movement, but we think it's probably a correction more than a trend of any sort," said a trader reached in the afternoon.

Treasuries were a factor, said another trader in the early afternoon. A weaker Treasury market did have an impact on the tax-exempt market, said the trader, but the trader noted that the impact was minimized by a great reception for primary issues.

Looking out on the horizon, the JobsOhio Beverage System looks to price $1.5 billion in the coming weeks, said Alan Schankel, managing director with Janney Montgomery Scott LLC. The bonds, he said, are secured by a senior lien on Ohio state liquor profits, with $1.2 billion being sold as taxable and $322 million as tax-exempt.

"JOBS will operate the state's liquor sales system under a 25-year franchise agreement with the state," Schankel said Thursday.

"With the proceeds securitizing liquor profits, Ohio will defease $800 million of outstanding debt, transfer $500 million to the state coffers and provide about $200 million plus a percentage of future liquor sale profits to promote economic development and jobs growth in the state."

In the broader market, Schankel said after two weeks of outflows, municipal mutual funds gained $291 million in the week ended Jan. 2.

Triborough Bridge prices

Heading up Thursday's healthy primary activity, the Triborough Bridge and Tunnel Authority of New York priced $786,905,000 of series 2013 revenue bonds, said a pricing sheet.

The offering included $539,205,000 of series 2013A subordinated revenue refunding bonds (//A+) and $247.7 million of series 2013B general revenue refunding bonds (//AA-).

The bonds were sold on a negotiated basis with Jefferies & Co., Goldman Sachs & Co. and Loop Capital Markets LLC as the senior managers.

The 2013A bonds are due 2014 to 2032 with 2% to 5% coupons. The 2013B bonds are due 2019 to 2030 with 4% to 5% coupons.

The offering "saw some decent interest in retail" on Wednesday, said one sellside source familiar with the deal. "Looks like the pricing came in pretty strong."

Proceeds will be used to refund the authority's series 2002E and 2003A revenue bonds.

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