Munis rally on safe haven flight; trading jumps; Renton School District to sell G.O. bonds

By Cristal Cody

Tupelo, Miss., Aug. 4 - The municipal bond market saw another strong day on Thursday. Government bonds rallied as recession fears stoked a sell-off of riskier assets and a flight to quality.

In secondary trading, it was a "very active day," one trader said. "One of my busiest days in a long time."

In primary activity, two competitive deals came from Manatee County, Florida, and Virginia College Building Authority. Manatee County sold $50 million of series 2011 tax anticipation notes, and the Virginia College Building Authority sold nearly $275 million of series 2011 educational facilities revenue bonds. Pricing details were not immediately available.

No new deals are expected to close out the week, but issuers could decide to come to market on Friday with the rally, according to sources.

"We've got the unemployment number on Friday," one source said. "We'll see what happens on Friday. If Europe keeps getting hammered and the bond market goes up in response to that, we could see another busy day."

On Friday, the Labor Department will release employment numbers.

Treasuries saw major gains on the long end on the flight into safer debt on Thursday. The 10-year benchmark Treasury note yield fell to 2.4% from 2.61%. The 30-year bond yield dropped to 3.67% from 3.9%.

Renton School District to sell

One new municipal bond deal was announced for the week ahead. Renton School District No. 403 in King County, Wash., plans to bring $63.035 million of unlimited tax general obligation bonds through a competitive sale.

The series 2011 bonds will price on Aug. 10, according to a preliminary official statement.

The bonds have serial maturities from 2016 through 2021 and 2023 through 2031.

A. Dashen & Associates is the financial adviser.

Proceeds will be used to finance a portion of the district's capital improvement plan, including the construction of schools.

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