Munis seen steady to firmer as new deals price; Fulton County, Ga., brings $232.28 million

By Sheri Kasprzak

New York, Sept. 7 - Municipal yields were flat to better on Wednesday as a flurry of new offerings priced and retail investors showed some interest. Shorter bonds were largely unmoved, but bonds beyond five years were improved.

Fifteen-year yields were down almost 6 basis points, and 20-year yields were down more than 5 bps. Ten-year yields were down more than 4 bps. Thirty-year yields were seen down more than 2 bps.

"What's out there is getting good reception, and that's giving us a boost," said one trader reached during the afternoon.

The trader noted that retail investors seem to be creeping back into the market after a long absence, suggesting that some stability is returning to municipals.

Even so, primary action has been very light recently, and this is concerning to some market participants.

"With a light new-issue calendar and tepid secondary volume, scarcity is a growing factor in many corners of the municipal market," said Alan Schankel, managing director with Janney Montgomery Scott LLC, in a report released Wednesday.

Fulton brings bonds

Wednesday saw some decent pricing activity after a slow week ahead of the Labor Day holiday. Leading the charge Wednesday was Fulton County, Ga., which priced $232.28 million of series 2011 water and sewerage revenue refunding bonds, according to a pricing sheet.

The bonds (Aa3//AA-) were sold on a negotiated basis with Citigroup Global Markets Inc. as the senior manager.

The bonds are due 2013 to 2028 with 2% to 5% coupons.

Proceeds will be used to refund the county's series 1998 and series 2004 water and sewerage revenue bonds.

Indianapolis bond bank prices

In other primary action, the Indianapolis Local Public Improvement Bond Bank sold $199.21 million of series 2011K bonds, said a pricing sheet.

The bonds (A1/A/) were sold through J.P. Morgan Securities LLC and Morgan Keegan & Co. Inc.

The bonds are due 2012 to 2027 with 3% to 5% coupons.

Proceeds will be used to purchase $180.49 million of series 2011A Marion County Convention and Recreational Facilities Authority bonds and to refund debt.

New York water deal ahead

The primary calendar for the coming week is already stacking up. One major offering coming down the pipeline is a $458 million deal from the New York City Municipal Water Finance Authority.

The authority is set to sell series 2012AA water and sewer system second resolution bonds on Tuesday, said a statement from the authority.

The offering includes $250 million of second resolution fixed-rate tax-exempt revenue bonds and $208 million of second resolution fixed-rate tax-exempt refunding bonds.

The bonds (Aa2/AA+/AA+) will be sold competitively. The financial advisers are Lamont Financial Services Corp. and Drexel Hamilton LLC.

Proceeds will be used to fund improvements to the city's water and sewer system and to refund outstanding first-resolution bonds.

Utah regents deal set

Another upcoming deal is from the State Board of Regents of the State of Utah, which is expected to bring $436.1 million of series 2011-1 taxable Libor index notes, said a preliminary official statement.

The offering includes $203.5 million of series 2011-1-A-1 notes, $140 million of series 2011-1-A-2 notes and $92.6 million of series 2011-1-A-3 notes.

The 2011-1-A-1 notes are due May 1, 2023, the 2011-1-A-2 notes are due May 1, 2029, and the 2011-1-A-3 notes are due May 1, 2038.

The notes (Aaa/AA+/) will be sold on a negotiated basis with RBC Capital Markets LLC as the bookrunner.

Proceeds will be used to provide long-term financing for student loans and to refund existing debt, particularly the board's series 1998 auction-rate bonds.

California State deal prepped

Coming up on Sept. 14, the Trustees of California State University will bring to market $245 million of series 2011A system-wide revenue bonds, said a preliminary official statement.

The bonds will be sold through senior managers Barclays Capital Inc. and Loop Capital Markets LLC.

The bonds are due 2012 to 2042.

Proceeds will be used to finance or refinance the construction, acquisition, equipment and renovation of existing California State University facilities.

Florida PECO deal planned

In other news, the Florida Board of Education plans to price $290 million of series 2011D public education capital outlay refunding bonds as early as Thursday, said a notice from the issuer. The bonds will be sold on an 18-hour notice.

The bonds will be sold competitively.

Proceeds will be used to refund existing PECO bonds.

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