Municipals off a touch; Louisiana brings $300 million; Illinois readies $300 million deal

By Sheri Kasprzak

New York, May 7 - Municipals posted some losses on Tuesday despite an active primary session, traders reported.

Outside of 10 years, yields were up by 1 basis point to 2 bps, one trader said in the afternoon.

Supply pressure is expected to be at a minimum this week, said a trader.

Trading did pick up in secondary, but investors were focused on primary activity, which picked up substantially.

Louisiana offers $300 million

Heading up the day's primary action, the State of Louisiana came to market with $300 million of series 2013 general obligation bonds, said a pricing sheet.

The offering included $130.71 million of series 2013A G.O. bonds and $169.29 million of series 2013B taxable G.O. bonds.

The 2013A bonds are due 2014 to 2033 with 2% to 5% coupons and 0.40% to 3.07% yields.

The 2013B bonds are due 2014 to 2026 with coupons from 0.24% to 2.88% and yields from 0.24% to 2.88%.

The bonds (Aa2//AA) were sold competitively with BofA Merrill Lynch winning the 2013A bonds and Raymond James/Morgan Keegan winning the 2013B bonds.

"The last new money G.O. issue was on March 1, 2012," said Jason Redmond, deputy treasurer for the state. "Four-hundred million general obligation bonds, series 2012A with the winning bid at a TIC of 2.715368%. This was tax-exempt."

The state is required to sell its debt through competitive bids at a public sale, Redmond said Tuesday. The state may offer bonds on a negotiated basis or a private sale if they are either sold to the federal government or the state or any of their agencies or corporations or if approved by two-thirds of the members of the state bond commission.

Proceeds will be used to finance general government, cultural, tourism, recreation, public safety, corrections, transportation and education projects.

Illinois debt ahead

The week's other large offering will hit the market on Thursday. The State of Illinois is ready to price $300 million of series May of 2013 sales tax revenue Build Illinois Bonds.

The bonds will price competitively with Public Financial Management Inc. as the financial adviser.

The state intends to finance capital projects with the proceeds from the deal.

Heading up Wednesday's primary action, the Massachusetts Water Pollution Abatement Trust plans to sell $204,645,000 of state revolving fund bonds (Aaa/AAA/AAA) competitively.

The two-tranche deal will be used to finance or refinance water abatement and drinking water projects.

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