Municipals end firmer ahead of three-day weekend; Houston ISD leads very light new-issue slate

By Sheri Kasprzak

New York, Aug. 29 – Municipals rounded out the Friday before the Labor Day weekend on a positive note with high-grade bond yields seen lower by 1 to 2 basis points, traders reported.

Despite some weakness seen for long Treasuries, municipals continued to see strong demand in secondary, said one trader.

The week ahead, however, will offer little in the way of supply. Just about $2 billion of new offers are set to price after the market gets back down to business Tuesday.

Houston ISD deal ahead

Heading up that light calendar is a $350 million negotiated offering from the Houston Independent School District.

The district is on tap to price series 2014A variable-rate limited tax schoolhouse bonds (Aaa/AAA/) through Morgan Stanley & Co. LLC and Citigroup Global Markets Inc.

The bonds are due June 1, 2039, and proceeds will be used to construct and equip school facilities within the district and to acquire new sites for such facilities.

In fact, the week ahead will include several school offerings out of the Lone Star State. Also ahead, the Keller Independent School District will offer $59,455,000 of refunding bonds through BOSC Inc., and La Porte Independent School District is set to price $110 million of schoolhouse G.O. bonds (Aa2/AA/) through First Southwest Co. On Thursday, the Del Valle Independent School District is scheduled to price $53.33 million of refunding bonds through BOSC.

L.A. harbor bonds set

Another significant offering for the week ahead comes from the Los Angeles Harbor Department. The department will offer $339,985,000 of series 2014 revenue bonds in three tranches.

The bonds (Aa2/AA/AA) will be sold through Wells Fargo Securities LLC and Siebert Brandford Shank & Co. LLC.

The offering includes $205.72 million of series 2014A AMT bonds, $89.51 million of series 2014B non-AMT bonds and $44,755,000 of series 2014C non-AMT bonds.

Proceeds from the deal will be used to finance private activity projects, including capital improvements to a seaport, docks and wharf, and to refund the department’s series 2006D revenue bonds.

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