Municipals improve again; Fairfax County, Va., prices $206.34 million tone-setting issue

By Sheri Kasprzak

New York, Jan. 9 - Municipal yields yet again improved, outperforming Treasuries as new issues hit the market to a favorable response from investors, said market insiders.

Both primary and secondary were seeing strong activity, said traders reached during the afternoon.

"Out long, we're not seeing much movement, but inside 10 years, yields were firmer. I'd say by about 5 bps around 10 years," one trader said.

"Outside of 10 years, it's flat to slightly firmer."

The deal of the day came from Fairfax County, Va. The competitive offering set the tone for the rest of the market, said a trader.

"It came early in the session, and after that, most of the day's sales did pretty well," the trader said. "It pretty much set the tone for primary."

JPMorgan wins bid

The county priced $206,335,000 of series 2013A public improvement general obligation bonds, said a pricing sheet.

The bonds (Aaa/AAA/AAA) were sold competitively with J.P. Morgan Securities LLC winning the bid with a 2.23% true interest cost, said Joe LaHait, debt coordinator for the county.

The bonds are due 2013 to 2032 with 1.5% to 5% coupons.

"The county is not required to sell its bonds competitively, and we have gone negotiated in the past," LaHait said in an interview.

"Per discussions with our financial advisers leading up to the sale today, we were in agreement to go competitive."

Proceeds will be used to finance school, transportation, public safety, parks and recreation and other improvements and to refund the county's series 2004A-B, 2005A, 2007A and 2008A public improvement bonds.

Hampton Roads deal set

A negotiated offering will lead Thursday's primary action. The Hampton Roads Sanitation District of Virginia plans to price $215.22 million of series 2013 wastewater revenue and refunding bonds through Raymond James/Morgan Keegan.

The bonds (Aa2/AAA/AA+) are due 2013 and 2019 to 2033 with a term bond due in 2038.

Proceeds from the offering will be used to finance capital wastewater projects and to refund existing revenue bonds.

Also coming up on Thursday, Mecklenburg County, N.C., is slated to come to market with $122 million of series 2013A G.O. refunding bonds (Aa1//AAA) through Wells Fargo Securities LLC.

Proceeds from that deal will be used to refund the county's series 2003B and 2004B variable-rate G.O. bonds, 2005A and 2005C G.O. bonds, 2007A G.O. bonds and 2008A-B G.O. bonds for debt service savings and to reduce variable-rate exposure.

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