Municipals end mostly unchanged; New York's Metropolitan Transportation brings $363.95 million

By Sheri Kasprzak

New York, Jan. 6 - Municipals were seen mostly unchanged on Wednesday in light trading action, insiders reported.

"Not much is moving," said one trader reached Wednesday afternoon.

"It's a slow day. We might be weaker by a basis point out on the long end of the curve, but we're really unchanged overall."

Market insiders were particularly interested Wednesday in Illinois' upcoming $3.466 billion sale of taxable general obligation bonds, which is set for Thursday.

"It might go cheap, but I think it will go well for Illinois," said one sellside source when asked about his predictions for the deal.

"Buyers have been skittish in the past, that's true, but I feel it might go OK. Institutional will likely buy up the majority of it. I don't think retail is going to give it a warm reception."

Moody's Investors Service rates the bonds A2, Standard & Poor's rates the bonds A+ and Fitch Ratings gives the bonds A+.

J.P. Morgan Securities Inc. will bring the bonds to market.

The bonds are due 2011 to 2015, and proceeds will be used to fund contributions to the state's retirement fund as well as capital expenditures.

Amid the light trading activity, the Alabama Public School and College Authority's series 2009A refunding capital improvement bonds were seen in action. The 5% 2016 bonds were trading at 2.942%.

Meanwhile, the Metropolitan Transportation Authority of New York priced Wednesday $363.945 million in series 2009A Build America Bonds, said a pricing sheet.

The bonds (A2/A/A) were sold through lead manager JPMorgan.

The bonds are due 2039 with a 6.668% coupon priced at par.

Proceeds will be used to fund transit projects.

Ohio prices $271.37 million

Elsewhere, the State of Ohio priced $271.37 million in series 2010 G.O. refunding bonds on Wednesday, said a pricing sheet.

The bonds (/AA/AA) were sold through Bank of America Merrill Lynch and JPMorgan.

The sale included $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.

The higher education bonds are due 2013 to 2021 with coupons from 3% to 5%. The common schools bonds are due 2013 to 2021 with coupons from 1.75% to 5%. The infrastructure bonds are due 2013 to 2021 with coupons from 1.75% to 5%. The yields were not immediately available.

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

Pima IDA sells revenue bonds

Also on Wednesday, the Pima County Industrial Development Authority of Arizona priced $130 million in series 2010 revenue bonds, said a term sheet released by a source familiar with the deal.

The bonds (Baa3/BBB-/BB-) were sold through senior manager Morgan Stanley & Co. Inc.

The bonds are due 2029 and have a 5.87% coupon priced at par.

Proceeds will be used to fund capital expenditures.

The county seat is Tucson.

N.J. Transportation sale ahead

On Wednesday, retail buyers purchased $360 million of the New Jersey Transportation Trust Authority's planned $852.5 million sale of series 2010 transportation system capital appreciation bonds, said a sellside source familiar with the deal. Retail pricing details were not immediately available.

The bonds (A1/AA/A+) will be offered to institutional investors on Thursday through Barclays Capital Inc.

Proceeds will be used to fund transportation infrastructure projects.

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