Muni yields seen firmer; Frederick County, Md., sells $149.82 million public improvement bonds

By Sheri Kasprzak

New York, Jan. 5 - Municipals recovered on Tuesday from Monday's slight losses with yields seen down by 1 or 2 basis points, traders reported. Meanwhile, primary activity remained light, led by a downsized offering from Frederick County, Md.

"It's feeling firmer out there," noted one trader reached in the afternoon.

"It's still pretty quiet; there's not a lot going on. I wouldn't call it a holiday feeling, but it's definitely quiet."

Another trader said she saw yields down.

"A solid basis point, maybe even two out long," she said.

In the light trading activity, the New Hampshire Turnpike Authority's series 2009A revenue bonds were moving. The 5.477% 2024 bonds were seen at 5.017%.

Elsewhere, the Florida Housing Finance Corp.'s series 2009A-1 revenue bonds were seen trading. The 4.8% 2029 bonds were trading at 4.667%.

Frederick County brings $149.82 million

Amid the light primary activity Tuesday, Frederick County in Maryland priced $149.82 million in series 2010 consolidated public improvement bonds, said John Kroll, the county's director of finance.

The offering was downsized from its planned $188.73 million. The county pulled its planned $38.91 million series 2010C refunding bonds late Monday, Kroll said.

A source familiar with the sale told Prospect News Tuesday afternoon that the refunding series was pulled because the savings from the refunding would be insufficient to justify the sale.

The sale included $59.705 million in series 2010A tax-exempt bonds and $90.115 million in series 2010B Build America Bonds.

The bonds (Aa2) were sold competitively with Citigroup Global Markets Inc. as the winning bidder. The county received 13 bids for the bonds, Kroll said.

The true interest cost for the 2010A bonds came in at 2.427392%, and the TIC for the 2010B bonds came in at 5.531465%.

Davenport & Co. LLC was the financial adviser.

The 2010A bonds are due 2011 to 2020 with coupons from 2% to 5%. The 2010B bonds are due 2021 to 2030 with coupons from 4.9% to 5.85%, all priced at par.

Proceeds will be used to fund capital improvements.

"In my opinion, the pricing came in as expected, reflecting the market's view of Frederick County's credit worthiness and strong financial management," Kroll said in an interview Tuesday.

Frederick, Md., is the county seat.

Metro Transit's $350 million deal ahead

Looking to Wednesday's primary action, the Metropolitan Transit Authority of New York City plans to bring to market $350 million in series 2009B Build America Bonds (A2/A/A) through J.P. Morgan Securities Inc.

The bonds are due 2039, and proceeds will fund transit projects.

The State of Ohio is also expected to price bonds on Wednesday. The state plans to sell $271.37 million in series 2010 general obligation refunding bonds with Bank of America Merrill Lynch and JPMorgan as the senior managers.

The deal includes $93.605 million in series 2010A higher education G.O. refunding bonds, $131.6 million in series 2010A common schools G.O. refunding bonds and $46.165 million in series 2010A infrastructure G.O. refunding bonds.

Proceeds will refund existing debt used to fund higher education, common schools and infrastructure needs.

Miami-Dade sale planned

Out on the horizon, Miami-Dade County in Florida plans to sell $600 million in series 2010A aviation revenue bonds, said a preliminary official statement.

Citigroup is the lead manager.

The sale includes $600 million in series 2010A-1 bonds and may also include series 2010A-2 Build America Bonds. The exact amount of the Build America Bonds was not immediately available.

The maturities have not been set.

Proceeds will be used to reimburse the county for port improvements, retire commercial paper and make a deposit to a debt reserve fund.

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