Municipal yields flat to firmer; California sells $539.25 million of G.O. refunding bonds

By Sheri Kasprzak

New York, Oct. 24 - Municipals were unchanged to slightly firmer on Wednesday as new issues continued to dominate the market, traders reported.

"We're seeing strong reception to new issues, and some names in secondary are getting better bids," said one trader.

Municipal yields had a firmer tone, though one trader said yields were little moved.

"The tone seems to be a touch firmer, but for the most part, we're flat," he noted.

Strong demand was evident for the State of California's $539.25 million sale of various purpose general obligation refunding bonds, said Alan Schankel, managing editor with Janney Montgomery Scott LLC.

"The 10-year maturity was priced as 5% to yield 2.14%, 37 basis points over the MMA AAA benchmark, which compares favorably to a September sale, in which the same maturity produced a yield 61 basis points above the benchmark," Schankel said Wednesday.

California brings G.O.s

In primary action, California sold $539,245,000 of G.O. refunding bonds competitively.

The bonds (A1/A-/A-) are due 2013 and 2018 to 2032 with 2% to 5% coupons.

Proceeds will be used to current and advance refund some of the state's G.O. bonds.

Miami-Dade sells debt

In other primary offerings, Miami-Dade County, Fla., priced $433.67 million of series 2012 subordinate special obligation refunding bonds, according to a pricing sheet.

The offering included $176,235,000 of series 2012A bonds and $257,435,000 of series 2012B bonds.

The 2012A bonds are due 2014 to 2030 with 3% to 5% coupons. The 2012B bonds are due 2030 to 2032 with term bonds due in 2035 and 2037. The serial coupons range from 3.875% to 5%. The 2035 bonds have a 5% coupon priced at 110.426. The 2037 bonds have a 4% coupon priced at 98.753 and a 5% coupon priced at 109.472.

The bonds (A2/A+/A+) were sold through Citigroup Global Markets Inc.

The county, Schankel said, priced the bonds in a retail order period with the 10-year maturity yielding 2.89%, 112 basis points over the benchmark.

Proceeds will be used to refund the county's series 1997A-C and 2005A special obligation bonds.

Honolulu deal set

Coming up on Thursday, the City and County of Honolulu will come to market with $890,355,000 of series 2012 G.O. bonds in seven tranches.

The offering includes $249.96 million of series 2012A tax-exempt bonds, $276,135,000 of series 2012B tax-exempt bonds, $27,735,000 of series 2012C tax-exempt bonds, $18.09 million of series 2012D taxable bonds, $75.06 million of series 2012E taxable bonds, $60,785,000 of series 2012F taxable bonds and $182.59 million of series 2012G taxable bonds.

The bonds will be sold through Bank of America Merrill Lynch and Piper Jaffray & Co.

The proceeds from the sale will be used to finance capital improvements for the city and county, as well as to refund existing G.O.s.

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