Muni yields weaken as supply trickles in; Denver Public Schools brings $396.24 million of COPs

By Sheri Kasprzak

New York, April 5 - Muni yields were up slightly on Tuesday as a few new deals hit the market, said traders.

"We're starting to see some supply, so yields are edging up a bit," said one trader.

"It's maybe 1 to 2 bps weaker across the curve. There's really not a lot of trading going on right now. Not much is moving."

Meanwhile, retail order periods were conducted on Tuesday for a few significant offerings. The New York City Transitional Finance Authority conducted the second day of a two-day retail order period for its $500 million sale of series 2011 future tax secured subordinated bonds (Aa1/AAA/AAA).

The bonds were pricing well, according to one trader familiar with the sale, who noted that the issuer was hoping to place most of the bonds with retail investors.

"I think it will do well," he said.

"I understand about $300 million has been placed so far [with retail]. That's pretty decent, especially considering that retail has really been hesitant. But it's a good credit, so it's not really surprising."

The authority will price for institutional investors on Wednesday. Wells Fargo Securities LLC is leading the syndicate.

The deal includes $483 million of series 2011E bonds and $17 million of series 2011F bonds.

Proceeds from the offering will be used to redeem existing future tax secured bonds.

Philly preps sale

The City of Philadelphia also conducted a retail order period on Tuesday for its planned $272.23 million offering of series 2011 general obligation bonds (A2/BBB/A-), which will be opened to institutional investors on Wednesday.

Retail investors, said one trader, seemed to be most interested in the longer maturities of the bonds. Some portions of the bonds are insured, he noted, and this might make a difference to skittish retail investors who need some reassurance, particularly for a lower-rated issuer.

"They're not a triple-A," noted that trader. "That makes a difference these days."

J.P. Morgan Securities LLC is the senior manager for the bonds, which are due 2011 to 2031 with term bonds due in 2036 and 2041.

Proceeds will be used to refund the city's series 1998 G.O. refunding bonds and its series 2001 G.O. bonds.

Denver sells COPs

Heading up Tuesday's primary action, the Denver Public Schools of Colorado came to market with $396.235 million of series 2011 taxable refunding certificates of participation, said a pricing sheet.

The COPs (Aa3/A+/) were sold through senior manager Goldman Sachs & Co.

The COPs are due Dec. 15, 2026 and Dec. 15, 2037. The 2026 COPs have a 6.22% coupon, and the 2037 COPs have a 7.017% coupon. Both priced at par.

Proceeds from the offering will be used to refund the school district's series 2008A-B taxable variable-rate COPs.

Legacy Health brings bonds

Elsewhere, the Oregon Facilities Authority sold $111.47 million of series 2011A refunding revenue bonds for the Legacy Health System on Tuesday, said a pricing sheet.

The bonds (A2/A+/) were sold through Citigroup Global Markets Inc. with Merrill Lynch and Wells Fargo Securities LLC as the co-managers.

The bonds are due 2012 to 2021 with coupons from 3% to 5.25%.

Proceeds will be used to refund Legacy Health's series 2001 bonds.

The health system is based in Portland, Ore.

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