Municipals end session steady amid investor apathy; Chicago eyes $435 million water bonds

By Sheri Kasprzak

New York, May 7 - Municipals rounded out a slow session mostly unchanged, market insiders said, as investors shrugged at the upcoming debt offerings.

With little in the calendar to get investors interested, it might be tough for the market to find a direction during the week, said one trader.

"There are only a few interesting things coming up this week, but overall, there's not much coming up that's really pulling folks into the market," he said.

"Chicago might inspire some interest, but beyond that, I'm thinking it's going to be a pretty quiet week. I don't suspect we'll move too far in one direction or the other."

New issue volume should total about $6.4 billion, according to Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC.

"The week's largest revenue issuance is a planned $435 million of water revenue bonds from the City of Chicago," said Kozlik in a report released Monday.

"Bond proceeds are expected to be used for improvements and refunding outstanding bonds. The Chicago revenue bonds are rated Aa3/AA-/AA+, while the city's general obligation ratings are Aa3/A+/AA-."

Other offerings on tap

The offering, which is slated to price Tuesday through senior manager Siebert Brandford Shank & Co., is just one of a few deals that total slightly more than $400 million that are scheduled for pricing during the week.

The Commonwealth of Massachusetts is also set to price $419.26 million of series 2012A commonwealth transportation revenue bonds (Aaa/AAA/) on a competitive basis Tuesday.

Those bonds, which are due 2013 to 2041, will be used to finance bridge-related capital expenditures for the commonwealth.

Stanford Hospital deal set

Later in the week, the California Health Facilities Financing Authority will sell $415 million of series 2012 revenue bonds on behalf of the Stanford Hospital and Clinics.

That deal, which is scheduled to price on Thursday, includes $340 million of series 2012A bonds and $75 million of series 2012B bonds.

The bonds (Aa3/AA-/) will be sold through Morgan Stanley & Co. LLC.

Proceeds will finance capital improvements to the Stanford Hospital and Clinics' properties as well as refund existing debt due in November 2012 and November 2013.

The State of Illinois will round out the larger offerings of the week with its $350 million sale of series 2012 taxable sales tax revenue bonds (/AAA/AA+) through KeyBanc Capital Markets Inc. That offering is scheduled to price Thursday.

The bonds are due 2013 to 2027 with term bonds due in 2032 and 2036.

Proceeds will be deposited into the Build Illinois general fund for capital improvements for the state.

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