Municipal yields close mostly firmer; Nevada draws 14 bids for $131.25 million refunding bonds

By Sheri Kasprzak

New York, April 10 - Municipal yields were slightly firmer on Wednesday as some of the week's largest offerings came to market, traders reported.

Yields were seen down by 2 basis points to 5 bps, particularly 10 years and in, said one trader. The market got off to a rocky start in the morning, the trader reported, with yields following Treasuries.

The bulk of the week's primary action hit the market on Tuesday and Wednesday, said the trader.

"We are seeing a boost in supply, but demand is still strong," he said.

"The stuff that's pricing this week is getting absorbed quickly. There doesn't seem to be an issue with supply pressure from what I've seen."

Nevada brings debt

In primary action Wednesday, the State of Nevada offered up $131,245,000 of series 2013 highway revenue motor vehicle refunding bonds, said a pricing sheet.

The bonds (Aa2/AA+/AA+) were sold competitively. Goldman Sachs & Co. won the bid at a 1.44775% true interest cost.

The bonds are due 2016 to 2023 with 3% to 5% coupons.

"The state had a very successful sale today on its 2013 highway revenue ... refunding bonds," said Lori Chatwood, the state's deputy treasurer of debt management.

"We received strong interest resulting in 14 bids with Goldman Sachs & Co. winning the bid."

Chatwood said the state is not required by law to sell its debt competitively.

"The state's strong credit, structure of the deal [short amortization with large maturities in each year] and the payment dates of June and December were determining factors in selecting a competitive sale structure," she said Wednesday.

Proceeds will be used to refund all or a portion of the state's series 2005 and series 2006 highway improvement revenue motor vehicle fuel tax bonds.

Florida Hurricane prices

Also during the session, the Florida Hurricane Catastrophe Fund Finance Corp. priced $2 billion of series 2013A revenue bonds, said a pricing sheet.

The bonds (Aa3/AA-/AA) were sold through Barclays.

The bonds are due 2016, 2018 and 2020. The 2016 bonds have a 1.298% coupon, the 2018 bonds have a 2.107% coupon, and the 2020 bonds have a 2.995% coupon. All priced at par.

Proceeds will be used to increase the corporation's cash on hand ahead of the 2013 hurricane season.

California G.O. bonds ahead

Coming up Thursday, the State of California is slated to price $2 billion of general obligation bonds.

During a retail order period Wednesday, preliminary pricing on the 30-year maturity came in at a 4% coupon priced at par, said a market insider familiar with the sale.

The bonds (A1/A/A-) will be sold through BofA Merrill Lynch.

The deal includes $1.25 billion of tax-exempt new-money bonds and $750 million of tax-exempt refunding debt.

Proceeds will finance capital improvements for the state and refund debt.

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