Munis close mixed amid dropping stocks, improving Treasuries; market awaits slate of new deals

By Sheri Kasprzak

New York, Oct. 3 - The municipals market weathered a volatile day for stocks by closing out somewhere in the middle. The tone was slightly firmer in spots but softer in others. The short end was mostly unchanged with intermediate bonds suffering some weakness.

Seven-year yields were up 2 basis points, and 10-year yields were up 3 bps. The rest of the market was fairly stable, except for 30-year yields, which were up by about 4 bps, said one trader.

"Stocks were definitely running the show today, so that gave Treasuries a push, but we've got this huge wave of volume coming down the line this week. It seems to be putting a little pressure on yields," said the trader.

Indeed, Tuesday alone will provide billions for investors to choose from. The action will be led by the Triborough Bridge and Tunnel Authority, which is poised to sell $607.355 million of series 2011A general revenue bonds through Morgan Stanley & Co. LLC and Rice Financial Products Co.

The authority intends to use the proceeds to refund its series 2001A and 2002A general revenue bonds.

Palm Beach, Dasny also ahead

Tuesday's activity will also include offerings from the Solid Waste Authority of Palm Beach County, Fla., and the Dormitory Authority of the State of New York.

The Palm Beach authority is set to bring $600 million of series 2011 refunding revenue bonds (/AA+/) through Citigroup Global Markets Inc. Those bonds will be used to refund the authority's series 2010 revenue bonds, which were utilized to make improvements to the county's solid waste facilities.

Dasny is slated to hit the competitive market Tuesday with $515.58 million of series 2011 state personal income tax revenue bonds.

The deal includes $467.25 million of series 2011E tax-exempt bonds and $48.33 million of series 2011F taxable bonds.

Proceeds will fund grants to libraries, state and voluntary agency facilities, the construction of a state court officers' training academy, the implementation of a state longitudinal data system and economic development grants under various state programs.

Lower Colorado deal set

In other Tuesday offerings, the Lower Colorado River Authority out of Texas plans to bring $595.08 million of series 2011 transmission contract refunding revenue bonds (A2/A/A+) through Morgan Stanley and Barclays Capital.

The deal includes $405.05 million of series 2011A bonds due 2012 to 2026 and $190.03 million of series 2011B bonds due 2012 to 2026.

Proceeds from the offering will be used to refund outstanding transmission contract revenue notes and other transmission contract revenue debt.

Trinity Health deal also ahead

Another major sale is expected to come to market during the week as well. The Trinity Health Credit Group is expected to bring $648.205 million of series 2011 composite issue revenue and revenue refunding bonds (Aa2/AA/AA) through several issuers.

The sale includes $326.835 million of series 2011MI hospital revenue and refunding bonds through the Michigan Finance Authority; $106.635 million of series 2011CA revenue and refunding bonds through the California Statewide Communities Development Authority; $14.345 million of series 2011OH revenue bonds through Franklin County, Ohio; $62.895 million of series 2011MD revenue and refunding bonds through Montgomery County, Md.; and $137.495 million of series 2011IL revenue bonds through the Illinois Finance Authority.

The proceeds will be used to advance or current refund existing debt and to pay for capital improvements to some of the hospital facilities operated by Trinity.

Goldman Sachs & Co. and Bank of America Merrill Lynch are the senior managers.

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