Municipal yields close unchanged to firmer; New York's MTA brings $750 million revenue bonds

By Sheri Kasprzak

New York, Dec. 21 - Municipal yields were once again largely unchanged to slightly better as primary action remained fairly light and Treasuries got a boost, said market insiders.

"We're basically in a holding pattern," said one trader.

"Things might be better slightly, like a basis point or two, but we're mostly flat and there's not a whole lot trading."

Light primary activity was led by a significantly upsized offering from the Metropolitan Transportation Authority of New York. The MTA sold $750 million of series 2010E transportation revenue bonds through Barclays Capital Inc. and Wells Fargo Securities LLC. The authority originally intended to price $350 million of the bonds.

The bonds (A2/A+/A+) are due Nov. 15, 2030 and Nov. 15, 2040. The 2030 bonds have a split maturity with a 6.734% coupon and a 7.134% coupon, both priced at par. The 2040 bonds have a 6.814% coupon, also priced at par.

The bonds were sold as Build America Bonds.

"I think it's proof that the BABs program works," a sellside source said Tuesday afternoon.

"Retail came in strong for this deal. They were able to upsize significantly, and I think that's proof that retail investors like the [Build America Bonds] program."

Proceeds from the offering will be used to fund commuter and transit projects.

Allegheny County sells notes

Over in the competitive market Tuesday, Allegheny County in Pennsylvania came to market with $50 million of series 2011 tax anticipation notes, said a pricing sheet.

The notes (MIG 1) were sold competitively with Boenning & Scattergood Inc. as the winning bidder. The true interest cost came in at 0.4%.

The 1% notes, which are due April 5, 2011, were not formally reoffered.

The county intends to use the proceeds to fund current operating expenses ahead of the collection of taxes.

The county seat is Pittsburgh.

Utah Regents bonds ahead

Coming up in the shortened week, the Utah Board of Regents will offer $389.45 million of series 2010EE student loan revenue bonds (Aaa/AAA/).

The sale includes $24.45 million of series 2010EE-1 fixed-rate tax-exempt AMT bonds and $365 million of series 2010EE-2 fixed-rate tax-exempt non-AMT bonds.

The bonds will be sold through RBC Capital Markets Corp. and Bank of America Merrill Lynch.

The 2010EE-1 bonds are due 2011 to 2012, and the 2010EE-2 bonds are due 2013 to 2026 with a term bond due Nov. 1, 2030.

Proceeds will be used to finance student loans to eligible Utah residents.

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