Munis see some firmness as primary dominates market; Idaho sells $500 million short-term notes

By Sheri Kasprzak

New York, June 19 - The municipals market found some pockets of firmness, traders reported, as new issues hit the market and some interest picked up in the secondary market.

"Primary is the focus, but we are seeing some trading, particularly around 10 years. But everything that's pricing is going well," one trader said.

The firmness was slight and spotty, the trader noted.

Meanwhile, the Massachusetts School Building Authority held a retail order period for its $750 million sale of series 2012A dedicated sales tax refunding bonds.

During the retail order period, bonds (Aa2/AA+/AA+) due in 2034 were seen carrying a 3.75% coupon to yield 3.85%, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

The bonds will be sold through senior managers Citigroup Global Markets Inc., Jefferies & Co. and J.P. Morgan Securities LLC.

The bonds are due 2012 to 2027 and 2030, and proceeds from the sale will be used to refund the authority's series 2005A dedicated sales tax bonds.

Thruway outlook revised

In ratings news, Moody's Investors Service revised its outlook on the New York State Thruway Authority to negative from stable. The action follows a similar action taken by Standard & Poor's.

The action was taken because of the uncertainty around financing the new Tappan Zee Bridge and associated risk for the construction project.

"The bridge contributes about 20% of the Thruway system's toll revenues," Schankel said.

Idaho brings $500 million

In primary action, the State of Idaho priced $500 million of series 2012 tax anticipation notes, said a pricing sheet.

The notes (MIG 1/SP-1+/F1+) were sold through senior manager Seattle-Northwest Securities Inc.

The notes are due June 28, 2013, have a 2% coupon and priced at 101.776.

Proceeds will be used to finance general capital needs in the 2012-13 fiscal year for the state ahead of the collection of certain taxes.

The state also came to market in July 2011 with $500 million of TANs. Those bonds are due June 29, 2012, have a 2% coupon and priced at 101.725.

Georgia G.O. bonds ahead

One of the largest offerings of the week is scheduled to price Wednesday. The State of Georgia plans to sell $741.54 million of series 2012 general obligation bonds.

The deal includes $520,055,000 of series 2012A G.O. bonds, $79.9 million of series 2012B taxable G.O. bonds and $141,585,000 of series 2012C G.O. refunding bonds.

The bonds will be sold competitively.

Proceeds will finance capital outlay projects for the state and refund existing G.O. bonds.

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