Municipals end quiet Monday flat to slightly firmer; Illinois prepares $700 million G.O. sale

By Sheri Kasprzak

New York, April 19 - Municipal yields held steady and some portions of the curve were slightly improved on Monday ahead of a relatively busy week for primary action, market sources told Prospect News.

"It really has been a very quiet day," said one trader.

"There are things moving here and there, but it has really been dead. Some maturities are faring better, but it is mostly flat out there."

Another trader agreed.

"I'd call it flat, maybe some short bonds are down by 1 basis point," said the trader.

Amid the light trading action, the State Public Works Board of California saw some interest in its recently priced series 2010A-1 capital projects subordinated bonds. The 5.125% 2021 bonds were seen trading at 5%.

Elsewhere, investors were taking pieces of the City of Chicago's revenue bonds sold for Chicago O'Hare International Airport last week. The series 2010A third-lien general airport bonds were particularly popular. The 5% 2035 bonds were seen at par.

Illinois G.O. bonds to price

Looking to the week's upcoming sales, the State of Illinois is gearing up to bring its previously announced $700 million in series 2010-3 general obligation taxable Build America Bonds on Tuesday, but investors might not be so enthusiastic about the offering, one sellsider said Monday.

"It really has less to do with their rating than just the fact that they've been to the trough a little too much in the past year or so," said the sellsider.

"Investors who are interested in Illinois bonds and who think they're a good buy have already bought Illinois and probably then some."

William Blair & Co. Inc. leads the syndicate bringing the bonds.

Proceeds will be used to provide grants to public schools within the state, fund transportation projects and finance capital projects.

Oregon BOE bonds planned

Also coming up on Tuesday, the Oregon State Board of Education plans to sell $343.265 million in series 2010 G.O. bonds through Bank of America Merrill Lynch and Citigroup Global Markets Inc.

The sale includes $44.725 million in series 2010A tax-exempt bonds, $73.5 million in series 2010B federally taxable bonds, $113.73 million in series 2010C Build America Bonds, $21.415 million in series 2010D tax-exempt bonds, $31.5 million in series 2010E federally taxable bonds and $58.395 million in series 2010F tax-exempt bonds.

Proceeds will be used to fund a variety of capital projects for Oregon State University and to refund existing G.O. bonds issued for the university.

Connecticut to sell to institutional

Coming up on Wednesday, the State of Connecticut is expected to sell $642.335 million in series 2010 G.O. bonds and G.O. bond anticipation notes to institutional investors following a retail order period.

The deal includes $105 million in series 2010A tax-exempt G.O. bonds, $184.25 million in series 2010A taxable G.O. Build America Bonds and $353.085 million in series 2010A G.O. BANs.

M.R. Beal & Co. is the senior manager.

The proceeds will be used to fund a variety of capital projects throughout the state.

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