Muni yields firm; primary expected to pick up; Massachusetts Water sells $283.57 million bonds

By Cristal Cody

Tupelo, Miss., April 30 - Municipal yields were slightly better on the long end on a very light trading day on Friday, an analyst told Prospect News.

"The market was slightly more positive this week but on very thin trading," said Matt Fabian, managing director of Municipal Market Advisors. "Not a lot of action and very little new issuance."

Friday was mostly a quiet day all around.

"Our yield curves on the 30-year ended at 453, 2 basis points lower than it was yesterday," he said. "The 10-year is unchanged. So the long end was slightly better on very thin trading."

Offerings from primary were almost nil over the week.

"We had a really big month in March, and April in general has had very little issuance," Fabian said. "The market should heat up again in May."

Two major upcoming sales were announced over the week.

The State of California Department of Water Resources plans to price $2 billion in power supply revenue bonds on Wednesday, according to a state sale calendar.

In addition, the Sisters of Charity of Leavenworth Health System intend to price $1.025 billion in revenue and revenue refunding bonds (/AA/AA-) through authorities in Colorado, Kansas and Montana, according to a preliminary official statement.

"The big California deal should go pretty well," Fabian said.

Massachusetts Water prices

Meanwhile, one new sale brought to market on Friday was from the Massachusetts Water Resources Authority. It sold $283.57 million in general revenue and general revenue refunding bonds (Aa1/AA+/AA), according to an official statement.

The authority sold $100 million of series 2010A general revenue bonds with serial maturities from 2015 through 2030 with 3% to 5% coupons to yield 1.88% to 4.07%, according to the statement.

In addition, the authority priced $183.57 million of series 2010B general revenue refunding bonds with serial maturities from 2014 through 2030 with 5% coupons to yield 1.54% to 4.17%.

Citigroup Global Markets Inc. was the senior manager of the negotiated sale.

Proceeds will be used to refund existing debt and fund upcoming construction projects.

University of Pittsburgh sells

Elsewhere in primary, the University of Pittsburgh of the Commonwealth System of Higher Education priced $118 million in series 2010 Pitt Asset Notes-Tax-Exempt Higher Education, according to an official statement.

The Panthers (MIG1/SP-1+/) priced at 101.628 with a 2% coupon to yield 0.47%.

The notes are due May 31, 2011.

Barclays Capital Inc. managed the negotiated sale.

Proceeds will be used to finance capital expenditures and refund $78 million of the university's outstanding series 2007 Panthers.

Massachusetts plans $400 million

In upcoming new offerings, the Commonwealth of Massachusetts intends to price $400 million in general obligation bonds, according to a preliminary official statement and notice of sale.

The series 2010A consolidated loan Build America Bonds (Aa1/AA/AA+) have serial maturities from 2024 through 2029.

The bonds will price through a competitive sale on Wednesday.

Siebert Brandford Shank & Co. LLC is the financial adviser on the sale.

Proceeds will be used to finance capital projects.

Erie County deal ahead

Also ahead, Erie County Fiscal Stability Authority of the State of New York expects to sell $156.5 million in sales tax and state aid secured bonds, according to a preliminary official statement.

The series 2010A senior bonds (Aa1//AA) have serial maturities from 2011 through 2017.

Roosevelt & Cross, Inc. is the senior manager of the negotiated sale.

Proceeds will be used to refund in full the authority's bond anticipation notes that mature on May 19.

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