Municipals end the week on firmer note; California to sell $8.8 billion in short-term notes

By Sheri Kasprzak

New York, Sept. 18 - Municipals retained their firm tone to round out the week ahead of a healthy supply of upcoming sales, said market insiders.

"It's looking good today," one trader said.

"The long end is better by probably 2 or 3 [basis points]. The short end looks better by a basis point or two."

The trader said more retail investors are expressing interest in the market. Also, a nudge in the tax-exempt supply is encouraging institutional investors to buy.

"It's like everything is converging to make things better," the trader said.

"Retail [investors are] back, tax-exempts are making a comeback, so it's been good."

Secondary remained fairly inactive on Friday, the trader said.

Among the light trades, the Port Authority of New York and New Jersey's 160th consolidated bonds were seen moving. The 4% 2031 bonds were seen at 4.024%.

Elsewhere, the Alabama Incentives Financing Authority's series 2009B refunding bonds were moving. The 4.967% 2019s were trading at 4.87%.

Also on Friday, the North Carolina Eastern Municipal Power Authority's series 2009B refunding bonds were seen in action. The 4.7% 2026 were seen at 4.353%.

California's $8.8 billion RANs ahead

Looking to the coming week, the State of California is set to bring $8.8 billion in series 2009-2010 revenue anticipation notes on Wednesday. The offering is the largest sale in a week crowded with several small offerings.

J.P. Morgan Securities Inc. will bring the one-year notes to market.

Proceeds will fund cash flow needs during the 2009-2010 fiscal year.

In the Midwest, the State of Ohio plans to sell $252.27 million in series 2009 bonds Tuesday after a retail order period on Monday.

The sale includes $147.675 million in series 2009C higher education general obligation refunding bonds, $80.525 million in series 2009C common school G.O. bonds, $19.325 million in series 2009A conservation projects G.O. refunding bonds and $4.745 million in series 2009M natural resources G.O. bonds.

Jefferies & Co. Inc will be the senior manager.

The bonds (Aa2/AA+/AA) are due 2010 to 2020.

Proceeds will be used to refund existing debt as well as fund natural resources projects, environmental conservation projects and common school improvements.

Also out of Ohio, Kent State University is set to sell $226.785 million in series 2009 general receipt bonds (A1/A+/) through JPMorgan and Merrill Lynch & Co. Inc. That sale is also expected for Wednesday.

Proceeds will be used to refund the university's series 2000 and 2008 bonds.

The university is located in Kent, Ohio.

Gwinnett plans October deal

Out on the horizon, the Gwinnett County Water and Sewerage Authority in Georgia is expected to price $271.775 million in series 2009 revenue bonds, said a preliminary official statement. The pricing is expected to occur Oct. 7.

The offering includes $247.82 million in series 2009A revenue bonds and $23.955 million in series 2009B taxable revenue Build America Bonds.

The 2009A bonds are due 2010 to 2028, and the 2009B bonds are due 2028 to 2029.

The bonds will be sold on a competitive basis with Public Financial Management Inc. as the financial adviser.

Proceeds will be used to fund improvements and extensions to the county's water and sewer system as well as to refund the authority's series 2004 bonds.

The county seat is Lawrenceville, Ga.

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