Municipal yields firm as Treasuries rally, supply drops; Dasny bonds free, seen trading up

By Sheri Kasprzak

New York, June 15 - Municipals closed out the week on a firmer note, market insiders reported, with yields seen better by 1 basis point to 2 basis points.

The week ahead could have larger-than-expected volume, with about $10 billion coming up, said Alan Schankel, managing director with Janney Montgomery Scott LLC. This number was revised from $5 billion quoted earlier in the week.

"Unlike this week, which had several billion dollar-plus issues, next week's slate is spread across a variety of states and sectors," Schankel said.

Among the larger offerings coming up is a $750 million deal from the Massachusetts School Building Authority. The authority will price dedicated sales tax refunding bonds through Citigroup Global Markets Inc., Jefferies & Co. and J.P. Morgan Securities LLC. Another large offering comes from the Peach State. Georgia plans to sell $741.54 million of general obligation bonds competitively on Thursday in three tranches.

Dasny bonds trade up

After being freed to trade Friday, the Dormitory Authority of the State of New York's $1,814,925,000 of series 2012A state personal income tax revenue bonds were seen trading up, said a trader reached during the session.

The bonds (//AA) were sold through Goldman Sachs & Co.

The bonds are due 2017 to 2033 with 1.5% to 5% coupons.

On Friday, the 5% 2027 bonds were seen trading at 2.88%, or 119.034, after pricing Thursday at 117.257. The 5% 2028s were seen trading on Friday at 3%, or 117.846, after pricing at 116.575.

Proceeds will be used to finance capital projects at the State University of New York, the City University of New York and SUNY Upstate Community College facilities and refund some maturities of the series 2000A-B Metropolitan Transportation Authority state service contract bonds and some maturities of various personal income tax revenue bonds issued by Dasny and the Empire State Development Corp.

Olympia school bonds price

Elsewhere, the Olympia School District No. 111 of Washington state released additional information on its $75.13 million of series 2012B unlimited tax G.O. bonds.

The bonds (Aa2/A+/) were sold competitively with the Bank of New York Mellon winning with a true interest cost of 3.57%, said Jennifer Priddy, assistant superintendent with the district.

"The district was not required to use a competitive sale method, but market conditions favored this approach," Priddy said in an interview Friday.

The bonds are due 2013 to 2016 and 2024 to 2031 with 3% to 5% coupons.

Proceeds will be used to construct and equip a new middle school, modernize and renovate an elementary school and make other capital improvements to school facilities in the district.

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