Municipals wrap up week unchanged; S&P upgrades Washington, D.C., G.O. debt to AA- from A+

By Sheri Kasprzak

New York, March 22 - Municipal yields were mostly unchanged on Friday amid light trading, market insiders reported.

Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC, attributed the unchanged tone to a lack of liquidity.

"Tax-exempt AAA benchmarks were unchanged in Thursday trading, despite the stronger tone of Treasury trading, as the municipal markets continued to digest the week's heavy supply load," he said Friday.

"That said, the unchanged markets reflect a lack of liquidity rather than underperformance per se, as evidenced by the New Jersey Turnpike Authority deal, which re-traded 5 to 10 basis points better in some maturities, even after being repriced higher on Wednesday."

Authority sells $1.4 billion

During the week, the New Jersey Turnpike Authority sold $1.4 billion of series 2013 turnpike toll revenue bonds, said a pricing sheet.

The bonds (A3/A+/A) were sold through senior manager J.P. Morgan Securities LLC.

The bonds are due 2016 to 2033 with term bonds due in 2038 and 2043. The serial coupons range from 3% to 5%. The 2038 bonds have a 5% coupon priced at 109.354. The 2043 bonds have a split maturity with a 4% coupon priced at par, a 4% coupon priced at 98.285 and a 5% coupon priced at 108.703.

"The New Jersey Turnpike issue, for example, finalized pricing with yield reductions of 8 bps in the 2023 maturity and 4 bps in the 4% coupon 2043 maturity," Kozlik said right after the pricing.

S&P lifts D.C. G.O. debt

Meanwhile, Standard & Poor's upgraded its rating on Washington, D.C.'s general obligation debt to AA- from A+. This makes the agency the third to put the city in the double A category.

"In executing the upgrade, S&P cited recent improvements in district revenues in addition to more conservative financial management policies, which have allowed D.C. to rebuild its fiscal reserves," Kozlik said.

"Despite the exposure of Washington to declines in federal spending, S&P issued a positive assessment of future fiscal conditions, indicating they see continued growth well in to the future - through FY2017."

Gaston, Collier to price

Looking ahead to the week's primary action, Gaston County, N.C., and Collier County, Fla., plan to hit the market with competitive offerings on Tuesday.

Gaston County will price $68,195,000 of series 2013 G.O. bonds, which are due 2014 to 2028.

The proceeds will be used to refund the county's series 2004 G.O. school bonds, series 2006 G.O. public improvement bonds and series 2007 community college G.O. bonds.

Collier County will price $66.17 million of series 2013 special obligation refunding revenue bonds (Aa2//AA).

Those bonds are due 2025 to 2035, and proceeds will be used to advance refund the county's series 2003 and 2005 capital improvement and refunding bonds.

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