Munis close weaker as Treasuries slip; Northeast snowstorm forces at least one postponement

By Sheri Kasprzak

New York, Jan. 11 - Municipal yields closed out the session on a sour note Tuesday after Treasuries suffered weakness, market insiders said.

"We're off 3 to 4 basis points in spots," said one trader reached during the afternoon.

"Treasuries are struggling, so I'd say we're probably just along for the ride for the most part. In general, we've had spotty trading activity. It's been on and off throughout the day. I'd say light to moderate depending on the time of day."

Meanwhile, a snowstorm brewing in the Northeast has forced the delay of at least one offering, said a sellsider close to the deal.

The New Jersey Educational Development Authority has put off its planned $1.645 million sale of series 2011 school facility construction bonds until Thursday. The deal had been slated to price Wednesday, but the sellsider said the snowstorm could force some bankers to take a snow day, making it tough for the deal to get done.

"It's just easier to say, 'We'll get to it once the storm's over,'" said the sellsider.

It could not be determined by press time Tuesday evening if other offerings will be impacted by the storm, which could dump more than a foot of snow on the region.

The bonds (Aa3) will be offered through Bank of America Merrill Lynch. The deal includes $1.2 billion of series 2011 tax-exempt bonds and $445 million of series 2011 taxable bonds.

Proceeds will be used to refund existing variable-rate demand bonds to either fixed-rate bonds or floating-rate notes and to terminate swap agreements.

Sutter plans $900 million sale

Looking ahead, Sutter Health of California announced Tuesday that it will undertake a massive offering: $900 million of series 2011 revenue bonds through the California Statewide Communities Development Authority and the California Health Facilities Financing Authority.

The offering includes $325 million of series 2011A bonds from California Statewide Communities Development and $575 million of series 2011B bonds from California Health Facilities Financing, according to a preliminary official statement.

The bonds (//AA-) will be sold on a negotiated basis with Morgan Stanley & Co. Inc. as the senior manager.

Proceeds will be used to financing the health-care system's ongoing capital plan and refund existing debt.

Based in Sacramento, Sutter operates hospitals and health-care facilities mostly in Northern California. The California Statewide Communities Development Authority, based in Walnut Creek, provides funding for a variety of nonprofit organizations. The California Health Facilities Financing Authority, based in Sacramento, provides funding for health-care facilities.

SCPPA deal ahead

Also coming up, the Southern California Public Power Authority is expected to come to market with $195.415 million of series 2011 transmission project revenue and refunding bonds, said a preliminary official statement.

The offering includes $167.455 million of series 2011A revenue refunding bonds and $27.96 million of series 2011 federally taxable revenue bonds.

The bonds (/AA-/AA-) will be sold on a negotiated basis with Goldman Sachs & Co. and Citigroup Global Markets Inc. as the senior managers.

The 2011A bonds are due 2012 to 2019, and the 2011B bonds are due 2011 to 2012.

Proceeds will be used to refund the authority's outstanding series 1991 bonds, which were originally used to finance additional capacity at the Southern Transmission Project. The remainder will be used to finance additional capacity at the project.

The authority is based in Pasadena and provides power to Southern California members.

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