Muni yields close out slow day mostly flat to slightly weaker; University of Texas preps sale

By Sheri Kasprzak

New York, Sept. 13 - Municipal yields were seen flat to a little weaker to kick off the week after suffering losses for most of the previous week, said a trader reached in the late afternoon.

"Not a lot happening today," he said.

"There's a little trading activity going on. We're pretty much flat across the board, but short bonds might be a little weaker. There's pretty much this weak tone everywhere, though."

Meanwhile, investors are gearing up to feast on a large offering Tuesday from the University of Texas System, which intends to bring $543 million in series 2010 revenue financing system Build America Bonds (Aaa/AAA/AAA) through J.P. Morgan Securities Inc.

A sellsider familiar with the deal said he expects it to go well, given the university's solid rating.

"It's true that yields are rising, but we're not really concerned," he said.

"They're a good issuer with a good rating, so it should go well."

The university system, which is based in Austin, Texas, intends to use the proceeds to refinance $21.3 million in tax-exempt commercial paper notes and fund various capital improvement projects.

D.C. area water deal ahead

Also coming up Tuesday, the Washington Suburban Sanitary District out of Maryland is set to price $240 million in series 2010 consolidated public improvement bonds.

The competitive offering includes $120 million in series 2010A tax-exempt bonds and $120 million in series 2010B Build America Bonds.

Proceeds will be used to construct water supply facilities, water supply lines and sewer pipes and may be used to replace short-term bond anticipation notes.

The district is based in Laurel, Md.

Madison deal downsized

In light primary activity Monday, the Madison Metropolitan School District of Wisconsin came to market with $32 million in series 2010 tax and revenue anticipation promissory notes, said a term sheet. The offering was cut in half from its planned $64 million size.

The notes were sold competitively with TD Securities USA LLC winning the bid.

The 1.5% notes are due Sept. 2, 2011 and were priced to yield 0.4%.

Proceeds will be used to finance the maintenance and operation costs of the city's school facilities as well as public school instruction for the 2010-2011 school year.

U of Hawaii sets sale

Out on the horizon, the Board of Regents of the University of Hawaii is set to sell $293.17 million in series 2010 university revenue bonds, said a preliminary official statement.

The sale includes $115.145 million in series 2010A -1 Build America Bonds, $23.61 million in series 2010A-2 tax-exempt bonds, $128.295 million in series 2010B-1 Build America Bonds and $26.12 million in series 2010B-2 tax-exempt bonds.

The bonds will be sold on a negotiated basis with Bank of America Merrill Lynch as the sole underwriter.

The 2010A-1 bonds and 2010B-1 bonds are due 2019 to 2025 with term bonds due 2030 and 2040. The 2010A-2 bonds and 2010B-2 bonds are due 2011 to 2018.

Proceeds will be used to finance or refinance costs associated with constructing and maintaining the university's Cancer Research Center of Hawaii.

The university, based in Honolulu, operates three university campuses, seven community college campuses and nine educational centers spread across six islands.

Nashville deal planned

In other upcoming deals, the Metropolitan Government of Nashville and Davidson County in Tennessee plans to sell $284.07 million in series 2010D general obligation refunding bonds, said a preliminary official statement.

The bonds will be sold through Jeffries & Co. and Morgan Keegan & Co. Inc.

The bonds are due 2011 to 2024.

Proceeds will be used to refund the government's series 2002, 2003 and 2004 multipurpose G.O. refunding bonds; series 2005A G.O. bonds; series 2005B G.O. refunding bonds; and series 2005C G.O. school bonds.

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