Yields little changed as new issues price; Texas Municipal Gas Acquisition sells $1.4 billion

By Sheri Kasprzak

New York, Nov. 20 - Municipal yields were mostly flat as a few of the larger new issues hit the market on Tuesday, traders said.

"Secondary is pretty quiet, and new issue stuff seems to be repricing at lower yields," said one trader in the afternoon.

"It looks as though if there's any movement at all, it might finally be on the softer side. We seem to be drifting slightly in spots with Treasuries."

Heading up the day's primary action, the Texas Municipal Gas Acquisition and Supply Corp. III came to market with $1,395,655,000 of series 2012 gas supply revenue bonds, according to a pricing sheet. The offering was upsized from $1 billion.

The bonds (A3/BBB/) were sold through J.P. Morgan Securities LLC, Bank of America Merrill Lynch and Citigroup Global Markets Inc.

The bonds are due 2013 to 2032 with 3% to 5% coupons.

Alan Schankel, managing director with Janney Montgomery Scott LLC, said the 30-year maturity initially priced at a 5% coupon to yield 4.15% but repriced at a 4.05% yield.

Proceeds will be used to prepay a 20-year natural gas supply agreement with Macquarie US Gas Supply LLC.

Connecticut, New York on tap

Rounding out the rest of the week's primary activity, the Connecticut Housing Finance Authority, the University of Connecticut and the Dormitory Authority of the State of New York all have decent-sized offerings ahead.

Dasny will come to market with $135 million of revenue bonds for the Rochester Institute of Technology.

The Connecticut Housing Finance Authority plans to sell $143,445,000 of housing mortgage program bonds in two tranches through J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Bank of America Merrill Lynch and Citigroup Global Markets Inc.

The University of Connecticut intends to price $90 million of student fee revenue refunding bonds through Jefferies & Co.

Hartford plans offering

In the week after Thanksgiving, another deal out of Connecticut will hit the market. The Metropolitan District of Hartford County, Conn., is scheduled to bring $246.69 million of G.O. bond anticipation notes competitively on Nov. 28.

The sale includes $58,925,000 of series 2012A notes, which are due Feb. 14, 2013, and $187,762,000 of series 2012B notes, which are due June 20, 2013.

Proceeds will be used to finance sewer, water and public improvement projects for the city and county of Hartford.

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