Municipal yields firm yet again as market prepares for supply; Guam sells $90.67 million

By Sheri Kasprzak

New York, April 13 - Municipal yields were improved for the second straight session. Yields were seen better by 1 to 2 basis points across the curve, traders reported.

"Everything basically past 10 years is firmer by a basis point or two," said one trader.

Another trader suggested that the current supply offered up some deals that might attract a larger range of buyers.

"You're seeing more taxables, which is something we haven't seen too much of," he said.

"I think there is a healthy appetite for taxables, and without BABs, there hasn't been much to meet that demand."

The North Texas Tollway Authority priced for retail investors some taxable bond anticipation notes, which are slated to price for institutional investors Thursday.

Also coming up on Thursday is $150 million of series 2011A taxable general obligation school loan bonds out of the State of Michigan. Those bonds (Aa2/AA-/) will be sold competitively. The proceeds will be lent to local school districts for capital improvements.

Short bonds outperform

Although municipals have seen a burst of firmness over the past couple of days, Alan Schankel, managing director with Janney Montgomery Scott LLC, said tax-exempts are having a hard time keeping up with Treasuries.

"Shorter maturities outperformed as the five/30 slope has widened by 12 bps since the end of March," Schankel said.

Guam sells $90.67 million

In primary action Wednesday, the Government of Guam priced $90.665 million of series 2011A hotel occupancy tax revenue bonds, said a pricing sheet.

The bonds (/BBB+/) were sold through Ramirez & Co. Inc. and Piper Jaffray & Co.

The bonds are due 2011 to 2021 with term bonds due in 2026, 2031 and 2040. The serial coupons range from 1% to 5.75%. The 2026 bonds have a 6% coupon priced at 98.759. The 2031 bonds have a 6.125% coupon priced at 97.16. The 2040 bonds have a 6.5% coupon priced at 98.388.

Proceeds will be used to construct a new Guam Museum and other projects to enhance Guam's tourism as well as to refund existing debt.

MEAG plans sale

Looking ahead, the Municipal Electric Authority of Georgia announced its intention to price $178.105 million of series 2011 subordinated bonds.

The offering includes $114.6 million of series 2011 project one subordinated bonds and $63.505 million of general resolution project bonds, said a preliminary official statement.

The project one bonds include $82.43 million of series 2011A bonds, $31.085 million of series 2011B bonds and $1.085 million of series 2011C taxable bonds. The general resolution project bonds include $5.785 million of series 2011A bonds, $55.77 million of series 2011B bonds and $1.95 million of series 2011C taxable bonds.

The bonds (A2/A/A+) will be sold on a negotiated basis with Morgan Stanley & Co. Inc. as the senior manager.

The 2011A project one bonds are due 2013 to 2021, and the 2011B project one bonds are due 2014 to 2021. The 2011C project one bonds are due in 2013.

The 2011A general resolution project bonds are due 2014 to 2021, and the 2011B general resolution bonds are due 2014 to 2021. The 2011C general resolution bonds are due 2013 to 2014.

Proceeds will be deposited into the authority's construction fund for a variety of capital improvements.

The authority is an electric utility based in Atlanta.

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