Bonds firm on lack of heavy supply; Miami-Dade County, Harris County price; JEA bonds rise

By Cristal Cody

Prospect News, July 19 - Municipal bonds traded tighter on Thursday as primary activity slowed. There were two offerings over the day from Miami-Dade County, Fla., and Harris County, Texas.

Miami-Dade County sold $537.21 million of transit system sales surtax revenue bonds.

Harris County priced a $160.43 million offering of 20-year revenue refunding bonds.

"The market feels good, there's just not enough supply to meet reinvestment demand," a bond source said on Thursday. "June, July and August, there's a lot of paper coming due and pre-refundeds being rolled over. There doesn't seem to be enough new issues to support that amount of money that needs to be reinvested."

Primary activity next week is expected to slow with few deals scheduled. One larger offering is expected from the Commonwealth of Pennsylvania, which plans to sell $361.3 million of general obligation bonds.

Municipal bond yields overall traded about 1 basis point tighter on the long end of the bond curve, from 2024 and out, a trader said.

New issues priced earlier in the week ended the day mixed in secondary trading.

"There are a few deals this week that came pretty high, like that New York Dormitory deal, I'm having trouble placing that," one source said.

The Dormitory Authority of the State of New York sold $1,044,375,000 of series 2012 state personal income tax revenue bonds (/AAA/AA) on Tuesday.

Jacksonville Electric Authority's offering of $178,365,000 of series 2012B water and sewer system revenue bonds (/AA/) priced the previous day traded better on Thursday.

The bonds are "up a point from where they came yesterday," a trader said.

The deal included $136,725,000 of series 2012B senior bonds and $41.64 million of series 2012B subordinated bonds.

Miami-Dade County prices

Miami-Dade County, Fla., priced $537.21 million of series 2012 transit system sales surtax revenue bonds with a 4.02% true interest cost on Thursday, an informed bond source said.

"The deal went well. We're pleased with the results," a source said.

The bonds (A1/AA/AA-) priced with 3.125% to 5% coupons on serial maturities from 2015 through 2033 and term maturities in 2037 and 2042.

The deal priced on a negotiated basis with J.P. Morgan Securities LLC as the senior manager.

The co-managers were Estrada Hinojosa & Co. Inc., Rice Financial Products Co., Citigroup Global Markets Inc., Bank of America Merrill Lynch, M.R. Beal & Co., Blaylock Robert Van LLC, Cabrera Capital Markets LLC, Jackson Securities Inc., Raymond James/Morgan Keegan, Morgan Stanley & Co. LLC, Goldman Sachs & Co., Barclays Capital Inc. and Jefferies & Co.

Proceeds will be used to refund and redeem the county's series 2011 bond anticipation notes.

Harris County too

Harris County, Texas, sold $160.43 million of revenue refunding bonds with a 3.19% TIC on Thursday, a source close to the deal said.

"It went a little better than I expected," the source said. "The interest rates held up the way we expected, and we had some pretty large institutional buyers who showed great interest in the issue."

The offering for the series 2012A tax and subordinate lien revenue refunding bonds was downsized from $175 million.

The bonds (/AAA/AAA) have serial maturities from 2013 though 2033.

JPMorgan was the senior manager of the negotiated sale. The co-managers were Barclays, Goldman Sachs, Estrada Hinojosa & Co. Inc., Fidelity Capital Markets Inc., Raymond James/Morgan Keegan and Siebert Brandford Shank & Co. LLC.

Proceeds will be used to refund the county's series 2002 revenue bonds.

Pennsylvania ahead

Coming up, the Commonwealth of Pennsylvania intends to sell $361.3 million of general obligation bonds, according to a preliminary official statement.

The series 2012 first refunding bonds (Aa2//) have a maturity in January and serial maturities from 2013 through 2023.

The bonds will price competitively on Tuesday.

Public Financial Management Inc. is the financial adviser.

Proceeds will be used to refund all or a portion of certain maturities of seven outstanding issues that include second series 2003, first series 2004, second series 2004, fourth series 2004, first series 2005, first series 2007A and first series 2007B G.O. bonds.

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