Municipals finish strong; issuance expected to be $4 billion for week; Massachusetts to price

By Sheri Kasprzak

New York, Sept. 16 - Municipals rallied on Monday after Treasuries got a boost from Larry Summers' withdrawal as a candidate for Federal Reserve chairman, market insiders reported.

Yields were better by 3 basis points to 6 bps, said one trader, with short bonds seeing the most improvement.

In comparison, the five-year Treasury note yield shrank by 6 bps.

The market is expected to see only about $4 billion of new issues this week, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC, after seeing about double that in the previous week.

Massachusetts among issuers

Among the week's new offerings, competitive offerings will make up the bulk of the larger deals.

Leading the pack, the Commonwealth of Massachusetts is set to bring to market $800 million of series 2013 general obligation revenue anticipation notes on Wednesday.

The offering includes $200 million of series 2013A notes due April 24, 2014, $300 million of series 2013B notes due May 29, 2014 and $300 million of series 2013C notes due June 26, 2014.

Proceeds will be used to finance some capital requirements for the commonwealth ahead of the collection of revenues during the 2014 fiscal year.

Virginia college deal set

Coming up on Tuesday, another large competitive deal will hit the market. The Virginia College Building Authority is scheduled to price $332.71 million of series 2013A educational facilities revenue bonds.

The bonds are due 2015 to 2034.

Proceeds from the sale will be used to finance some capital projects and acquire equipment at public institutions of higher education within the commonwealth.

Ohio will offer up $400 million of G.O. bonds on Thursday competitively.

The deal includes $300 million of series 2013B tax-exempt common schools G.O. bonds and $100 million of series 2013B taxable Third Frontier Research and Development G.O. bonds.

Proceeds will be used to finance capital facilities for common schools within the state and to fund research and development projects.

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