Munis end firmer, but investors remain wary; School District of Philadelphia sells $425 million

By Sheri Kasprzak

New York, July 1 - The overall tone of the municipal market might be firmer, but the market just can't seem to build up enough steam to make some real gains, said one trader reached Thursday.

"All week long, we've been fairly firm, yields here and there are down a bit, but we just can't seem to make any big movements one way or the other, really," said the trader.

"Treasuries are helping, certainly, but investors are really pulling back. There definitely is a concern over defaults, and maybe we really will see a difference in the second half of the year, but it's too soon to tell. Hopefully something will knock us out of this funk we seem to be in. It would be nice."

In secondary action, the Illinois Finance Authority's bonds recently priced for NorthShore University Health System were seen moving. The 5.25% 2022 bonds were seen at 4.067% Thursday afternoon. The 5% 2037s were trading at 4.821%.

Elsewhere, the Empire State Development Corp.'s Liberty refunding bonds priced Wednesday were moving in secondary. The 5.625% 2046s were seen at 5.237%.

Philadelphia school bonds price

Moving to the primary market, the School District of Philadelphia sold Thursday $425 million in series 2010A tax and revenue anticipation notes, said a term sheet.

The notes (MIG 1/SP-1/) were sold through Wells Fargo Securities LLC.

The 2.5% notes are due June 30, 2011 and were priced at 101.207 to yield 1.25%.

Proceeds from the sale will be used to finance operating expenses ahead of the collection of taxes and other revenues.

Rhode Island preps deal

Coming up, the State of Rhode Island and Providence Plantations plans to bring to market $350 million of fiscal-year 2011 general obligation tax anticipation notes, said a preliminary official statement.

J.P. Morgan Securities Inc. is the senior manager.

The notes are due June 30, 2011.

Proceeds will be used to fund general expenses of the state.

RTA sets offering

In other upcoming offerings, the Regional Transportation Authority of Illinois, which serves Cook, DuPage, Kane, Lake, McHenry and Will counties, is expected to price $140 million in series 2010C G.O. working cash notes, said a preliminary official statement.

The notes (Aa3/AA/AA-) will be sold on a negotiated basis with Bank of America Merrill Lynch as the senior manager. The co-managers are Loop Capital Markets LLC and Cabrera Capital Markets LLC.

The notes are due July 1, 2012.

Proceeds will be used to meet cash flow deficits.

Based in Chicago, the authority oversees the Chicago Transit Authority bus and rail system, the Metra commuter rail and the Pace suburban bus service.

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