Municipals little moved ahead of heavy new-issue calendar; Los Angeles preps $1.3 billion deal

By Sheri Kasprzak

New York, June 23 – Municipals closed unchanged Monday as the market awaited another heavier calendar of offerings, market insiders reported. About $9 billion is expected to price this week, led by a couple of billion-dollar deals.

“There’s not a lot trading and not a lot pricing, so we’re waiting on these new deals,” a trader said in the afternoon.

Treasuries gave little guidance to the market, with yields mixed.

Despite the larger-than-typical calendar, new issuance is expected to continue trending lower, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC. Issuance is already 25% lower than last year with $115 billion sold through the end of May. In comparison, $153 billion priced during the same period of 2013.

Los Angeles deal set

The $9 billion calendar is anchored largely by two billion-dollar offerings, including $1,363,520,000 of series 2014 tax and revenue anticipation notes from the City of Los Angeles.

The notes (MIG 1/SP-1+/F1+) will be sold through senior manager Ramirez & Co. Inc., and proceeds from the deal will be used to finance capital projects for the city.

The notes are due June 25, 2015.

Washington preps bonds

The other major deal during the week comes from the State of Washington, which is scheduled to price $1,199,215,000 of series 2015 general obligation bonds on Wednesday through both competitive and negotiated sales.

The deal includes $192,005,000 of series 2015A-1 various purpose G.O. bonds, $39 million of series 2015A-2 variable purpose G.O. bonds, $445.23 million of series R-2015A various purpose G.O. bonds, $85.98 million of series 2015T taxable G.O. bonds and $437 million of series R-2015B motor vehicle fuel tax G.O. refunding bonds.

The 2015A-2 bonds will be sold via negotiated sale with BofA Merrill Lynch as the senior manager. The remainder will be sold competitively.

Proceeds from the bonds (Aa1/AA+/AA+) will be used to finance capital projects, including new school construction, as well as to refund existing G.O. debt.

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