Municipals hold steady even as Treasuries slip; Miami-Dade prices $346.03 million G.O.s

By Sheri Kasprzak

New York, May 18 - Municipal bonds were largely unmoved on Wednesday even as Treasuries hit a bump following a sell-off, market insiders reported.

Short bonds, said one trader, were seeing a good amount of demand on Wednesday.

"It's been interesting because I think a lot of us were concerned about what the [increased] supply would do to yields, but there's been enough demand to offset it," said the trader. "Today, short bonds were seeing good demand. Yields inside of 10 years are firmer by 1 to 2 [basis points]."

Meanwhile, yields on 10-year Treasury notes were seen up 6 bps during the session.

Supply in the primary market Wednesday remained fairly robust, led by the $346.025 million sale of general obligation bonds from Miami-Dade County of Florida. The State of Oregon also priced $320 million of bonds Wednesday, but details of the sale were not immediately available.

Primary supply is increasing, said Alan Schankel, managing director with Janney Montgomery Scott LLC, on Wednesday.

According to Schankel, $7.7 billion of new bonds are expected in the next 30 days, approaching the levels seen in February but still below the $10 billion level of January.

"With yields at cyclical lows and maturing debt expected to approach $50 billion in June, we imagine issuers will schedule more issues for sale to take advantage of the unusual, favorable technical environment," said Schankel.

Miami brings G.O.s

Leading Wednesday's action, Miami-Dade County sold $346.025 million of series 2011 general obligation and G.O. refunding bonds, according to pricing sheets.

The offering included $196.705 million of series 2011A Building Better Communities Program G.O. bonds, $37.945 million of series 2011B parks program G.O. refunding bonds and $111.375 million of series 2011C seaport G.O. refunding bonds.

The bonds (Aa2/AA-/) were sold competitively.

The 2011A bonds are due 2012 to 2035 with a 2041 term bond. The serial coupons range from 3% to 5%. The 2041 bonds have a 5% coupon priced at 99.072.

The 2011B bonds are due 2011 to 2026 with 3% to 5% coupons.

The 2011C bonds are due 2011 to 2026 with 2% to 5% coupons.

Proceeds will be used to fund public infrastructure projects and refund the county's series 1999 bonds.

Chelan utility bonds price

Elsewhere, the Public Utility District No. 1 of Chelan County in Washington State priced $179.72 million of series 2011 refunding bonds.

The offering included $107.5 million of series 2011A bonds and $72.22 million of series 2011B bonds.

The bonds (Aa2/AA/AA+) were sold through Barclays Capital Inc.

The 2011A bonds are due 2012 to 2026 with 2% to 5.5% coupons. The 2011B bonds are due 2012 to 2026 with 2% to 5.5% coupons.

Proceeds will be used to refund senior consolidated system bonds.

Houston sells Cosmos bonds

In other primary news, the Houston Higher Education Finance Corp. sold $63.825 million of series 2011 education revenue bonds for the Cosmos Foundation, Inc., according to a term sheet.

The bonds (/BBB/) were sold through Morgan Keegan & Co. Inc. and Jefferies & Co.

The deal included $58.74 million of series 2011A bonds and $5.085 million of series 2011Q taxable bonds.

The 2011A bonds are due 2021, 2031 and 2041 with 5.875%, 6.5% and 6.875% coupons, respectively. The 2011Q bonds are due May 15, 2026 and have an 8.75% coupon priced at par.

Proceeds will be used to finance or refinance the construction, equipment and acquisition of three new charter schools in Houston.

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