Municipal yields flat ahead of $8.1 billion of new issues; California to sell $549 million

By Sheri Kasprzak

New York, Oct. 22 - Municipal yields were mostly flat on Monday as the market gears up for about $8.1 billion in new supply, insiders reported.

"Trading is kind of light," said one trader.

"I think quite a few things are pricing for retail today, and the market is really waiting to see how things go."

The week's large supply is led by a major offering from Colorado's Catholic Health Initiatives, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC.

The health care system is set to sell $1.5 billion of taxable bonds through J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC.

The offering comes on the heels of news that Catholic Health East will merge with Trinity Health. The proceeds from the bond sale will finance mergers, acquisitions and joint ventures, according to a company statement.

St. Louis prices for retail

Meanwhile, amid the retail order periods conducted Monday, the Metropolitan St. Louis Sewer District of Missouri offered to retail $147.4 million of series 2012B wastewater system revenue refunding bonds. The offering will open to institutional investors Tuesday.

"I think it went well," said one market source asked about the deal. There's "lots of good retail interest; pricing levels are good."

The bonds (//AA+) are being sold through Siebert Brandford Shank & Co., and proceeds will be used to advance refund a portion of the district's outstanding series 2004A bonds.

Honolulu deal set

In other upcoming deals, the City and County of Honolulu is scheduled to sell $890,355,000 of series 2012 general obligation bonds through Bank of America Merrill Lynch and Piper Jaffray & Co.

The offering will be conducted in six tranches. The deal includes $249.96 million of series 2012A tax-exempt bonds, $276,135,000 of series 2012B tax-exempt bonds, $27,735,000 of series 2012C tax-exempt bonds, $18.09 million of series 2012D taxable bonds, $75.06 million of series 2012E taxable bonds, $60,785,000 of series 2012F taxable bonds and $182.59 million of series 2012G taxable bonds.

California to price G.O.s

Heading up Tuesday's primary action, the State of California is ready to sell $549.8 million of series 2012 various purpose G.O. refunding bonds (A1/A-/A-).

The bonds will be sold competitively.

Proceeds from the deal will be used to current and advance refund some of the state's G.O. debt.

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