Municipals flat ahead of Fed; Virginia School Authority, Arkansas deals in pipeline

By Cristal Cody

Tupelo, Miss., Oct. 28 – Municipals ended mostly unchanged in thin trading on Tuesday ahead of the Federal Reserve’s monetary policy announcement, market sources said.

“It’s one of the quietest days I’ve seen all year,” one trader said. “I sold 40 bonds. Everyone is sitting on their hands, waiting on the announcement tomorrow.”

The Federal Reserve is widely expected to announce the end of the government’s quantitative easing program.

Municipals were off about 1 basis point on the long end in light activity on the day, the trader said.

Treasuries ended weaker in light trading with the 10-year Treasury note yield up 2.7 bps at 2.284% and the 30-year bond yield up 2.3 bps at 3.057%.

Primary activity stayed light over the day, according to market sources.

Coming up in deal action over the week, the New York Liberty Development Corp. is expected to price $1.63 billion of series 2014 3 World Trade Center revenue bonds, according to a market source.

The deal includes $1.08 billion of class 1 bonds due Nov. 15, 2044, $300 million of class 2 bonds due Nov. 15, 2041 and $250 million of class 3 bonds due Nov. 15, 2044.

The bonds will be sold on a negotiated basis with Goldman Sachs & Co. and J.P. Morgan Securities LLC as the senior managers.

Proceeds will be used to finance the completion and construction of Tower 3 of the World Trade Center.

Arkansas preps revenue bonds

Looking to early November, the State of Arkansas intends to price $206.53 million of federal highway grant anticipation and tax general obligation revenue bonds, according to a notice of sale.

The series 2014 bonds (Aa1/AA/) are due 2015 through 2026.

The bonds will price via a competitive offering on Nov. 5.

Stephens Inc. is the financial adviser for the deal.

Proceeds from the transaction will be deposited into a program fund.

Children’s Hospital to price

The Children’s Hospital Medical Center in Cincinnati is in the deal pipeline with a $300 million offering of taxable bonds due May 15, 2044, (Aa2/AA/), according to a preliminary offering memorandum.

JPMorgan and Goldman Sachs are joint bookrunners for the negotiated offering.

Proceeds from the deal will be used for corporate purposes, which may include the payment of capital expenditures.

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