New issues postponed as East cleans up after Sandy; Central Utah Water sells $130.83 million

By Sheri Kasprzak

New York, Oct. 31 - Municipals were quiet on Wednesday as the market slowly got back to business following Hurricane Sandy, market insiders said. Many trading desks were operating with minimal staff, said one trader reached in the afternoon.

"Almost everything is day-to-day at this point," said the trader.

"We're really short-staffed here, and I'm sure that's the case for many other desks as well. Trading, to say the least, was very light."

About $6.4 billion of new issues were on tap for the week before the extremely destructive hurricane made landfall early in the week, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

"This week's slate of new issuance totaled $6.4 billion before Sandy entered the picture in a dramatic, painful fashion, and although we suspect some issues will be priced during the shortened three-day session, most of the borrowing will be postponed, especially loans from the hardest-hit areas," Schankel wrote in a report released Wednesday.

"The larger discussion in coming days, weeks and months will be the response to rebuilding damaged infrastructure. The anticipated expense associated with recovering and rebuilding typically raises questions about the impact on credit quality of the towns, cities and states directly impacted.

"It is, of course, too early to make any meaningful assessment, especially given the immensity of the storm's damage, but we do not expect widespread defaults or rating downgrades to impacted communities."

Central Utah Water sells debt

In one of the offerings that did hit the market Wednesday, the Central Utah Water Conservancy sold $130,825,000 of series 2012C water revenue bonds, according to a pricing sheet.

The bonds (/AA+/AA+) were sold through George K. Baum & Co. Inc.

The bonds are due 2022 to 2042 with 5% coupons. The full pricing details were unavailable Wednesday.

Proceeds will be used to fund a portion of the district's capital plan, including costs related to the Central Water Project and the district's share of the Central Utah Project, as well as to fund a debt service reserve fund.

New Jersey note sale on hold

The largest deal of the week is still up in the air as the State of New Jersey assesses the extensive damage caused by the hurricane.

The state initially intended to hit the market Tuesday with $2.6 billion of tax and revenue anticipation notes, which are due June 27, 2013.

There was no word Wednesday when or if the short-term note deal will price.

The state intends to use the proceeds to finance revenues and expenditures for the state's general fund ahead of the collection of taxes and revenues during the 2013 fiscal year.

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