Yields firm slightly as New York Municipal Water brings $529.7 million; Massachusetts prices

By Sheri Kasprzak

New York, March 23 - Municipals were slightly firmer, particularly in the intermediate portion of the yield curve, said market insiders, but a large primary offering wasn't enough to give the supply-starved market direction.

"Maybe a basis point or so [firmer] in the middle," said one trader when asked about the tone of the market.

"It's been tough to find direction for the past several sessions. There's not enough supply to push us up or down, so we're hovering here for a while."

The New York City Municipal Water Finance Authority sale on Wednesday might have been a large offering for the supply-hungry muni market, but it didn't draw enough interest from investors to move the market, the trader noted.

After a two-day retail order period that offered up less-than-stellar yields, the authority priced for institutional investors $529.7 million of series 2011GG water and sewer system second general resolution revenue bonds through M.R. Beal & Co.

The bonds (Aa2/AA+/AA+) are due 2012 to 2013 and 2016 to 2026 with 2.5% to 5% coupons. The deal also featured a term bond due in 2043 with a 5% coupon priced at 96.882.

Proceeds will be used to acquire and expand the city's water and sewer system.

Massachusetts prices bonds

Another large offering for the session came out of the Commonwealth of Massachusetts, which brought to the table $440.815 million of series 2011 general obligation bonds, said a pricing sheet.

The bonds were sold through Siebert Brandford Shank & Co. LLC.

The sale included $80.815 million of series 2011B G.O. bonds and $360 million of series 2011A consolidated loan G.O. bonds.

The 2011B bonds are due 2012 to 2021 with coupons from 2% to 5%. The 2011A bonds are due 2022 to 2029 with 5% coupons across the board.

Proceeds will be used to reimburse the commonwealth for capital expenditures.

PANYNJ sells bonds

Elsewhere during the session, the Port Authority of New York and New Jersey competitively sold $225 million of 167th series consolidated bonds, said Steve Coleman, spokesman for the authority.

Merrill Lynch won the competitive bid for the bonds (Aa2/AA-/AA-). The true interest cost came in at 4.198005%. Coleman said there were seven bidders for the offering on Wednesday.

The bonds are due 2012 to 2028 with 3% to 5.5% coupons.

Proceeds will be used to refund the authority's versatile structure obligation and series A commercial paper notes.

Oregon prices lottery bonds

Out West, the State of Oregon priced $182.85 million of series 2011 lottery revenue bonds, said a term sheet.

The deal included $131.745 million of series 2011A tax-exempt bonds, $27.57 million of series 2011B tax-exempt refunding bonds and $23.535 million of series 2011C federally taxable bonds.

The 2011A bonds are due 2023 to 2028 and 2030 to 2031. Coupons range from 4% to 5.25%. The 2011B bonds are due 2019 to 2021 with 3% to 5% coupons. The 2011C bonds are due 2021 to 2022 with 4.345% and 4.495% coupons, respectively, both priced at par.

Morgan Stanley & Co. Inc. and Citigroup Global Markets Inc. were the senior managers.

Proceeds will be used to make loans for infrastructure projects.

Sunshine State preps sale

Looking out on the horizon, the Sunshine State Governmental Financing Commission of Florida is poised to price $253.21 million of series 2011A revenue bonds for Miami-Dade County, said a preliminary official statement.

The bonds (Aa3/A+/) will be sold on a negotiated basis with J.P. Morgan Securities LLC and Morgan Stanley as the senior managers.

Proceeds will be loaned to the county to refinance some of its existing debt.

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