Municipals improve 3 bps to 5 bps amid heavier action; New Jersey Transportation bonds price

By Sheri Kasprzak

New York, April 17 - Municipal yields improved by 3 basis points to 5 bps, said traders, as new issue action and secondary activity picked up.

"It's a combination of new issues pricing and a brisker secondary pace," said one trader reached during the afternoon.

"We're seeing some larger deals bumped in secondary. Three to five [bps lower] in spots."

The week's new issue volume has been well-received and -absorbed, said another trader.

"Supply seems to be working in our favor, as demand remains very strong," he noted.

New Jersey Transportation prices

The New Jersey Transportation Trust Fund came to market with $877,065,000 of series 2013 transportation system refunding bonds, said a pricing sheet.

The bonds (A1/A+/A+) were sold through Goldman Sachs & Co.

The offering included $538,845,000 of series 2013A bonds and $338.22 million of series 2013B taxable bonds.

The 2013A bonds are due 2013 to 2024 with 1% to 5% coupons. The 2013B bonds are due in 2016 and 2018. The 2016 bonds have a 1.087% coupon and priced at par, and the 2018 bonds have a 1.758% coupon and priced at par.

The issuer "finalized a two-part sale, with the 2024 maturity of the $540 million tax-free portion priced as 5% coupon to yield 2.62%, while the $335 million taxable portion was priced to yield 1.087% in 2016 and 1.758% in 2018, about 75 bps and 105 bps over like maturity Treasuries," said Alan Schankel, managing director with Janney Montgomery Scott, on Wednesday.

Proceeds will be used to finance transportation projects throughout the state.

Nashville hits market

Elsewhere during the session, the Metropolitan Government of Nashville and Davidson County, Tenn., brought $374,665,000 of series 2013A general obligation improvement bonds, said a pricing sheet.

The bonds (Aa1/AA/) were sold through Goldman Sachs.

The bonds are due 2020 to 2033 with 3% to 5% coupons.

Proceeds will be used to construct, equip, acquire and furnish capital projects and to retire a portion of the government's commercial paper bond anticipation notes.

Charlotte sells transit COPs

In other primary action, the City of Charlotte, N.C., sold $170,625,000 of series 2013 transit projects certificates of participation, said a pricing sheet.

The offering included $122,655,000 of series 2013B transit projects/phase III COPs and $47.97 million of series 2013C transit projects refunding COPs.

The COPs (//AA+) were sold through BofA Merrill Lynch.

The 2013B COPs are due June 1, 2022 and have a split maturity with a 3% coupon priced at 104.945 and a 3% coupon priced at 104.115.

The 2013C certificates are due 2014 to 2033 with 2% to 5% coupons.

Proceeds will be used to finance a portion of the cost of the extension of the city's light rail transit system.

The city most recently came to market in March 2012 with $175,495,000 of series 2012A G.O. refunding bonds (Aaa/AAA/AAA). Those bonds are due 2013 to 2032 with 1.25% to 5% coupons, and the proceeds from the deal were used to refund the city's series 2002 G.O. bonds and to repay commercial paper notes.

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