Primary calendar active in week ahead; munis firm; New Jersey tobacco bonds tighten 10 bps

By Cristal Cody

Tupelo, Miss., April 5 - Municipal bonds closed firmer in quiet activity on Thursday as many traders headed out early before the Good Friday holiday.

"Pretty quiet," a trader said. "There's a bunch of new issues out there, and the market has a better tone to it."

Municipal bond yields traded 2 basis points tighter in the 10-year range and flat on the longer end, the trader said.

"There was a decent calendar this week considering it's a holiday week. The demand was there," a source said. "I don't think I've ever seen a calendar this heavy on a Easter week for new issues."

Activity centered on Monday, Tuesday and Wednesday with offerings from California Statewide Communities Development Authority for Kaiser Permanente, the Port Authority of New York and New Jersey and a sale of cigarette tax revenue refunding bonds from the New Jersey Economic Development Authority.

"The Jersey tobacco deal is trading up in the secondary market," the trader said. "It's trading up 10 basis points. Decent amount of yield in a market where there really isn't a lot of yield, so that's why it's doing well."

The New Jersey Economic Development Authority came to market with $1,041,745,000 of the series 2012 cigarette tax revenue refunding bonds on Tuesday.

The bonds (Baa1/BBB+/BBB+) due 2012 to 2029 priced with 2% to 5% coupons.

The upcoming week should see pricing action following this week's heavy deal calendar.

"Next week is going to be pretty big, too," a bond source said.

Deals are expected from several issuers including Los Angeles, Memphis and the Maryland Transportation Authority. The Maryland authority intends to price three tranches through competitive sales for the Baltimore/Washington International Thurgood Marshall Airport.

Maryland Transportation ahead

The Maryland Transportation Authority plans to sell $211,365,000 of airport parking revenue refunding bonds (A2/A/A-) in two tranches, according to a preliminary official statement.

The deal includes $71.86 million of series 2012A bonds and $139,505,000 of series 2012B bonds due 2013 through 2027 for Baltimore/Washington International Thurgood Marshall Airport projects.

The bonds will price through a competitive sale on Wednesday.

Public Financial Management, Inc. is the financial adviser.

Proceeds will be used to refund outstanding maturities of the series 2002A and 2002B airport parking revenue bonds.

The authority also intends to sell $50,905,000 of series 2012A passenger facility charge revenue bonds (A2/A/A) for the airport through a completive sale on Wednesday, according to a preliminary official statement.

The bonds have serial maturities from 2013 through 2032.

Public Financial Management is the financial adviser.

Proceeds will be used to finance a portion of the costs of construction of airport facilities projects at the airport.

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