Munis up sixth straight day; University of Pittsburgh, Broward County School Board plan deals

By Cristal Cody

Tupelo, Miss., May 13 - Municipal bonds ended the week stronger bring the winning stretch to six straight days of gains, a bond source said Friday.

"There's very light supply and ongoing persistent investor demand," the source said. "Very few bonds are being sold by issuers."

He added that demand is strong even though "lately they have a growing worry on the future of the tax exemption. People have been competitive to buy bonds on the idea that Congress may take away the tax exemption."

Municipal bond supply is down more than 50% since the start of the year, compared to the same time period last year, the source added.

Spreads are tightening across higher- and lower-rated muni bonds.

"Without anything else to buy, people are forced to buy lower-rated bonds so things are tightening as a result," the source said.

Coming up, a $326.915 million offering of general obligation bonds from Connecticut in the week ahead is expected to go well, one bond source said.

Despite the light issuance trend, a couple of deals were announced at the end of the week. The School Board of Broward County, Florida, intends to sell $175 million of series 2011A certificates of participation and the University of Pittsburgh of the Commonwealth System of Higher Education plans to offer $114 million of Pitt Asset Notes-Tax Exempt Higher Education Registered Series of 2011.

Broward schools to sell COPs

The School Board of Broward County, Fla., intends to sell $175 million of series 2011A certificates of participation, according to a preliminary official statement.

The COPs (Aa3/AA+/) have a maturity in 2012 and serial maturities from 2018 through 2024.

Citigroup Global Markets Inc. is the lead manager of the negotiated sale.

Proceeds will be used to refund portions of the outstanding series 1997B, series 2001A and series 2001B certificates.

Pittsburgh university refunds

The University of Pittsburgh of the Commonwealth System of Higher Education intends to offer $114 million of Pitt Asset Notes-Tax Exempt Higher Education Registered Series of 2011, according to a preliminary official statement.

The notes (MIG 1/SP-1+/) are due in 2012.

Barclays Capital Inc. will manage the negotiated sale.

Proceeds will be used to finance the refunding of $96 million of the university's outstanding series 2010 Panthers and for university capital expenditures.

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