Munis firm in light secondary action; California readies $8.8 billion RANs; Ohio to price

By Sheri Kasprzak

New York, Sept. 21 - The municipal bond market firmed on Monday as secondary market action remained fairly light, said traders.

"Yields are down by about 2 or 3 basis points, pretty much across the yield curve," said one trader reached in the afternoon.

"Retail interest is pretty good, but trading volume is still fairly light."

The trader noted that Build America Bonds are still crowding out more traditional taxable and tax-exempt offerings.

Meanwhile, the primary market is readying itself for Wednesday's sale of $8.8 billion in series 2009-2010 revenue anticipation notes from the State of California.

"I think it will go well," said one sellside source connected to the offering.

"We're expecting a lot of interest. I really think both institutional and retail are going to get in on it."

The deal will come to market through J.P. Morgan Securities Inc.

The notes are due 2010.

Proceeds will fund fiscal year 2009-2010 cash flow management.

Secondary action remains light

Elsewhere, a trader said even though the tone of the market was firmer on Monday, trading volume was relatively light to kick off the week.

The North Carolina Eastern Municipal Power Agency's recently priced series 2009B revenue bonds were seen in action. The 4.5% 2022 bonds were seen at 4.287%. The series 2009A 4.75% 2030 bonds were seen at 4.286%. The 2009A 5.25% 2019s were seen at 3.995%.

In other trading action, the Port Authority of New York and New Jersey's 160th series consolidated bonds were seen moving. The 4.25% 2034 bonds were seen trading near par.

Also, the New Mexico Hospital Equipment Loan Council's bonds sold for Presbyterian Hospital were moving. The 5.125% 2035s were trading at 4.708%.

New Mexico Finance deal prices

In primary action Monday, the New Mexico Finance Authority priced $50 million in series 2009 senior-lien public projects revolving fund revenue bonds, said a term sheet.

The sale included $37.88 million in series 2009D-1 tax-exempt bonds and $12.12 million in series 2009D-2 taxable bonds.

The 2009D-1 bonds are due 2010 to 2020 with term bonds due 2024, 2029 and 2034. The serials have coupons from 0.9% to 4.05%, all priced at par. The 2024 bonds have a 4.5% coupon, the 2029 bonds have a 4.75% coupon, and the 2034 bonds have a 5% coupon, all priced at par.

The 2009D-2 bonds are due 2040 with a 5.35% coupon, priced at par.

Piper Jaffray & Co. is the senior manager.

Proceeds will be used to originate loans to fund governmental unit projects.

Ohio sale planned

Looking to Tuesday's pricing action, the State of Ohio is scheduled to bring $252.27 million in general obligation and G.O. refunding bonds through Jefferies & Co. Inc. A retail order period was conducted Monday.

The offering includes $147.675 million in series 2009C higher education G.O. 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.

The bonds are due 2010 to 2020.

Proceeds from the sale will refund debt and fund natural resources projects, environmental conservation projects and common school improvements.

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