Yields seen bit better as retail shows interest; Cucamonga Valley Water brings $109.48 million

By Sheri Kasprzak

New York, Aug. 16 - Municipal yields were seen slightly improved on Tuesday as retail investors seemed to be taking a solid bite out of the week's major offerings, market insiders reported.

"There were a few retail order periods going on today for some big deals," said one trader.

"Retail seems to be snapping them up. That's a good sign because they've [retail investors] been kind of skittish the past few weeks."

The trader said muni yields were seen down by 1 basis point to 2 bps across the board during the session and noted that improved Treasuries were also helping the market along.

Meanwhile, the market is still awaiting the final pricing of two major offerings: a $1.021 billion sale from the Indiana Finance Authority and a $1 billion sale from the California Department of Water Resources. The latter issuer is set to offer its bonds to institutional investors on Wednesday.

University of California ahead

Also coming up out of California, the Board of Regents of the University of California said Tuesday that it plans to price $405 million of series 2011 general revenue bonds. Those bonds are slated to price on Wednesday.

The offering includes $360 million of series 2011AB tax-exempt bonds and $45 million of series 2011AC taxable bonds, said a preliminary official statement.

The bonds (Aa1/AA/AA+) will be sold on a negotiated basis with Barclays Capital Inc. and Morgan Stanley & Co. LLC as the lead managers.

Proceeds will be used to finance or refinance capital projects as well as to refund the university's series Q revenue bonds.

Cucamonga Valley sells bonds

Heading up Tuesday's light primary action, the Cucamonga Valley Water District of California sold $109.475 million of series 2011A water revenue refunding bonds, said a term sheet.

The bonds (Aa3/AA+/) were sold through Stone & Youngberg LLC.

The bonds are due 2012 to 2028 with term bonds due in 2031 and 2035. The serial coupons range from 0.25% to 5.25%. The 2031 bonds have a 5.25% coupon, and the 2035 bonds have a 5.375% coupon. Neither of the term bonds was reoffered.

Proceeds will be used to defease and refund the district's series 2000 and 2001 certificates of participation and to acquire a reserve fund insurance policy and a municipal bond insurance policy to insure a portion of the bonds.

Minnesota 911 bonds price

Elsewhere during the day, the State of Minnesota brought $60.36 million of series 2011 public safety radio revenue bonds, said a pricing sheet.

The bonds (Aa3/AA+/AA) were sold through senior manager Jefferies & Co.

The bonds are due 2012 to 2027 with 1% to 5% coupons.

Proceeds will be used to finance a statewide radio system plan for emergency response organizations.

Florida BOE preps deal

Another deal coming up during the week is a $225.51 million sale of series 2011A lottery revenue refunding bonds from the Florida Board of Education.

The board plans to sell the bonds competitively on a day-to-day basis.

The bonds are due 2014 to 2022, and proceeds from the offering will be used to refund the board's series 2002C and 2003A lottery revenue bonds.

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