Municipals round out session flat to slightly firmer; Dasny brings $684.11 million of PITs

By Sheri Kasprzak

New York, June 2 - Municipals shook off a dip in Treasuries on Thursday and maintained a mostly firm tone, said market insiders.

"We might be firmer by a basis point or so in the middle," said one trader.

"Otherwise, I'd call it flat. I think it really speaks to the strength [of munis] that Treasuries are off and we're still holding our own."

The 10-year Treasury note climbed by 2 bps on Thursday after falling to a 2011 low of 2.94% on Wednesday.

Thursday marked an active day for the primary market, with the majority of the week's offerings coming down the pipeline.

The Dormitory Authority of the State of New York led the day's action, pricing $684.11 million of series 2011 general purpose state personal income tax revenue bonds.

The deal included $653.85 million of series 2011A tax-exempt bonds and $30.26 million of series 2011B taxable bonds, said a pricing sheet.

The bonds (/AAA/AA) were sold competitively with Citigroup Global Markets Inc. winning the bid.

The 2011A bonds are due 2012 to 2036 with a term bond due in 2041. The serial coupons range from 2% to 5%. The 2041 bonds have a 5% coupon priced at 104.311.

The 2011B bonds are due 2012 to 2021 with 0.5% to 3.75% coupons.

Proceeds will be used to finance certain state matching grants under the HECap program, certain grants under the HEAL NY grant program, capital projects at the City University of New York senior college facilities and community college facilities, grants under the EXCEL program, contributions to the costs of the remediation of hazardous waste sites, various environmental infrastructure projects and water pollution control projects.

New York environmental bonds

Elsewhere during the session, the New York State Environmental Facilities Corp. priced $520.675 million of series 2011B state clean water and drinking water revolving fund revenue bonds for the New York City Municipal Water Finance Authority, said a pricing sheet. The offering was upsized from $510.6 million.

The bonds (Aa1/AA+/AA+) were sold through Morgan Stanley & Co. Inc. and Jefferies & Co.

The bonds are due 2012 to 2031 with term bonds due in 2036 and 2041. The serial coupons range from 2% to 5%. The 2036 bonds have a 5% coupon priced at 103.907. The 2041 bonds have a 5% coupon priced at 103.5.

Proceeds will be used to provide financial assistance to the New York City Municipal Water Finance Authority to finance or refinance water pollution control and drinking water projects, as well as to refund existing bonds.

Omaha powers deal

Also in primary action, the Omaha Public Power District of Nebraska came to market with $143.69 million of series 2011A electric system revenue bonds, said a pricing sheet.

The bonds (Aa1/AA/) were sold through Goldman, Sachs & Co. and Bank of America Merrill Lynch.

The bonds are due 2014 to 2024 with coupons from 3% to 5%.

Proceeds will be used to make upgrades to the city's electric system, as well as refund its series 2002B, 2003A and 2005A bonds.

J.P. Morgan wins Ventura deal

Paul Derse, chief financial officer for Ventura County, Calif., said on Thursday that J.P. Morgan Securities LLC won the competitive bid for the county's $137.855 million sale of series 2011-12 tax and revenue anticipation notes (MIG 1/SP-1+/).

The true interest cost, Derse said, came in at 0.275476%. The notes priced on Wednesday with a 2.25% coupon priced at 101.965. The notes are due June 29, 2012.

"The county is not required to sell through competitive bid," Derse said in an interview.

"We believe our county is a good credit, and therefore competitive bidding made sense to us again this year."

Proceeds will fund the county's general operation expenses ahead of the collection of taxes and revenues.

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