Muni yields end unmoved; New York's Metropolitan Transportation Authority brings $500 million

By Sheri Kasprzak

New York, March 17 - Municipals ended the day largely unchanged on Wednesday with slight weakness seen in the market, insiders reported.

"I'd call it unchanged, but there is a weaker tone," said one trader.

"It's been reasonably busy here [on the secondary side]. We're seeing a fair number of trades."

In trading action, the Virgin Islands Water and Power Authority's series 2010C taxable bonds were moving. The 6.85% 2035 bonds were seen at 6.725%.

Primary still dominated the market with another large offering priced Wednesday.

The Metropolitan Transportation Authority of New York City sold $500 million in series 2010 dedicated tax fund bonds, said a pricing sheet.

The bonds were sold in two tranches: a $56.8 million tranche of series 2010A-1 tax-exempt bonds and a $443.2 million tranche of series 2010A-2 Build America Bonds.

The 2010A-1 tax-exempt bonds are due 2011 to 2017 with 2% to 5% coupons, and the 2010A-2 Build America Bonds are due 2018 to 2025 with term bonds due 2030 and 2040. The serials have coupons from 4.655% to 5.535%, all priced at par. The 2030 bonds have a 5.989% coupon, priced at par, and the 2040 bonds have a 6.089% coupon, also priced at par.

J.P. Morgan Securities Inc. and Ramirez & Co. Inc. were the lead managers.

The authority plans to use the proceeds to fund commuter projects.

California State prices

The State of California brought $352 million in series 2010 revenue bonds Wednesday for the Trustees of the California State University, said a pricing sheet released by the state treasurer's office.

The bonds were sold through Barclays Capital Inc.

The deal included series 2010A tax-exempt bonds and series 2010B taxable Build America Bonds. The exact breakdown was not immediately available.

The 2010A bonds are due 2010 to 2031 with 1% to 5% coupons and yields from 0.33% to 4.7%. The 2010B bonds are due 2022 to 2025 with term bonds due 2030 and 2041. The taxable serials have coupons from 5.449% to 5.699%, all priced at par. The 2030 bonds have a 6.434% coupon, priced at par, and the 2041 bonds have a 6.848% coupon, also priced at par.

"The deal saw strong demand for the tax-exempt bonds from individual, or retail, investors," said Tom Dresslar, spokesman for the treasurer's office.

"They placed orders totaling $193.5 million. The state was able to fill $84.7 million of those orders."

Proceeds will be used to fund capital improvements to California State University's campuses.

The university is based in Long Beach, Calif.

Marco Island sells

In other primary activity, the City of Marco Island, Fla., brought to market $56.525 million in series 2010 utility system revenue and revenue refunding bonds, according to a pricing sheet.

The bonds (A2/A/A-) were sold through Bank of America Merrill Lynch and RBC Capital Markets Inc.

The deal included $49.16 million in series 2010A tax-exempt utility system improvement and refunding revenue bonds and $7.365 million in series 2010B utility system improvement refunding revenue bonds.

The 2010A bonds are due 2011 to 2025 with term bonds due 2029, 2034 and 2040. The coupons range from 2.5% to 5%. The 2010B bonds are due 2011 to 2020 with a term bond due 2033. The coupons range from 2.055% to 5.35%, and the 2033 bonds have a 6.794% coupon, priced at par.

The city will use the funds to refund existing utility system debt and make capital improvements to the city's utility system.

LA airport bonds ahead

Looking out on the horizon, the Department of Airports of the City of Los Angeles plans to price $897.78 million in series 2010A senior revenue bonds, said a preliminary official statement.

The bonds (Aa3/AA/AA) will be sold on a negotiated basis with Siebert Brandford Shank & Co. LLC as the lead manager.

Proceeds will be used to fund capital expenditures at Los Angeles Airport as well as to refund existing commercial paper.

MTA sale planned

Also coming up, the Metropolitan Transportation Authority is set to sell $475 million in series 2010 revenue anticipation notes, said a preliminary official statement.

The notes (//F1+) will be sold through lead managers Citigroup Global Markets Inc. and M.R. Beal & Co.

The notes are due Dec. 31, 2010.

Proceeds will be used to fund operating and maintenance expenses incurred by the authority.

Wisconsin to price

Looking ahead to the coming week, the State of Wisconsin is expected to price $183.665 million in series 2010-2 general obligation refunding bonds, said a preliminary official statement released by the Wisconsin Capital Finance Office. The sale is tentatively scheduled for March 24.

The bonds will be sold on a negotiated basis with Citigroup and Loop Capital Markets LLC as the lead managers.

The bonds are due 2013 to 2022.

Proceeds will be used to refund existing debt.

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