Munis hold steady ahead of influx of new issues; Oregon prepares $788.06 million note sale

By Sheri Kasprzak

New York, July 18 - Municipals were largely unmoved on Monday as the market waited to see how a new flood of offerings will be digested, said traders reached during the session.

Just over $9 billion of new, long-term negotiated offerings are expected in the coming week, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC, including a bevy of deals from highly rated issuers.

"We're waiting to see what happens," said one trader.

"I suspect it will go pretty well. A lot of the names out there are high-quality [issuers]."

The trader noted that recent volatility in the Treasuries market has led investors to seek out higher-rated bond issues over the past several weeks.

Oregon preps note sale

Heading up the offerings is a $788.06 million sale of series 2011A full faith and credit tax anticipation notes from the State of Oregon. The state is poised to sell the notes (MIG 1/SP-1+/F1+) through Citigroup Global Markets Inc. and Bank of America Merrill Lynch on Wednesday.

The notes are due June 29, 2012, and the proceeds will fund the state's seasonal cash needs and cash management requirements from 2011 to 2013.

San Francisco water deal ahead

Another major offering from the West Coast comes from the Public Utilities Commission of the City and County of San Francisco, which is slated to bring $775.57 million of series 2011 water revenue bonds in four tranches on Thursday.

The deal includes $634.12 million of series 2011A bonds, $30.39 million of series 2011B bonds, $35.49 million of series 2011C bonds and $75.57 million of series 2011D bonds.

The bonds (Aa3/AA-/) will price competitively.

Proceeds will be used to fund capital projects for the commission's water supply, storage and distribution system.

Washington to bring G.O.s

In other pricing action, the State of Washington is gearing up to offer $741.93 million of series 2012 general obligation bonds on Wednesday.

That deal includes $390.84 million of series 2012A various-purpose G.O. bonds, $323.215 million of series 2012B-1 and 2012B-2 motor vehicle fuel tax G.O. bonds and $27.875 million of series 2012T taxable G.O. bonds. The 2012A, 2012B-1 and 2012T bonds will be sold competitively. J.P. Morgan Securities LLC is the senior manager for the 2012B-2 bonds.

Proceeds will be used to pay or reimburse the state for various capital projects, state buildings and higher education institutions and Columbia River Basin water supply development, farmland preservation, riparian protection and outdoor recreation, as well as state and local highway improvements.

New York sets deal

Also ahead in the coming week, the City of New York is prepared to bring $600 million of series 2012 G.O. bonds.

The deal includes $515 million of series 2012A-1 tax-exempt bonds, which will be sold through Citigroup, and $85 million of series 2012A-2 taxable bonds, which will be sold competitively.

The bonds (/AA/AA) will price on Wednesday.

Proceeds will be used to fund capital requirements for the city.

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