Municipals rally along with Treasuries; Chicago brings $416.35 million of G.O. bonds

By Sheri Kasprzak

New York, Nov. 9 - Municipal bond yields were firmer across the yield curve as the market moved along with Treasuries, said traders reached during the day. Stocks took a dive Wednesday as investors took a cautious stance in response to worries that Italy may seek a bailout.

One trader pointed out that Treasuries were rallying and municipals were following along.

Seven-year yields were the most improved, with yields seen down by 7.5 bps, said one trader. Five- and 10-year yields were down 5 bps and 15-year yields were down almost 3 bps.

It was an exceptionally active day for the primary market, with several large offerings coming down the pipeline, including some substantial competitive offerings.

Chicago brings G.O.s

Heading up Wednesday's booming primary activity, the City of Chicago sold $416.345 million of series 2011 general obligation bonds, said a pricing sheet.

The bonds (Aa3/A+/AA-) were sold through BMO Capital Markets LLC.

The offering included $210.64 million of series 2011A tax-exempt bonds and $205.705 million of series 2011B taxable bonds.

The 2011A bonds are due 2032, 2035 and 2040. The 2032 bonds have a 4.625% coupon priced at 98.389 and the 2035 bonds have a 5.25% coupon priced at 102.758. The 2040 bonds have a 5% coupon priced at 99.398.

The 2011B bonds are due in 2042 and have a 6.034% coupon priced at par.

Proceeds will be used to finance infrastructure and right-of-way improvements, including streets and alleys, economic development projects, city buildings, parks and recreational facilities, grants to assist nonprofit organizations and educational facilities and the acquisition of property.

Philadelphia sells refunding bonds

Also during the day, the City of Philadelphia came to market with $184.855 million of series 2011 water and wastewater revenue and refunding bonds, said a pricing sheet.

The offering included $135 million of series 2011A revenue bonds and $49.855 million of series 2011B refunding bonds.

Ramirez & Co. Inc. was the senior manager for the negotiated deal.

The 2011A bonds are due 2036 and 2041. The 2036 bonds have a split maturity with a 4.5% coupon priced at 99.122 and a 5% coupon priced at 103.324. The 2041 bonds have a 5% coupon priced at 102.948.

The 2011B bonds are due 2016 to 2026 with 4% to 5% coupons.

Alan Schankel, managing director with Janney Montgomery Scott LLC, said yields were lowered in most maturities for the bonds, including a 5 bps drop to 4.6% in the 30-year maturity.

Proceeds will be used to refund existing bonds and finance new capital projects.

North Carolina prices debt

Over in the competitive market, the State of North Carolina priced $400 million of series 2011C capital improvement limited obligation bonds, said a pricing sheet.

The bonds (Aa1/AA+/AA+) were sold competitively. Wells Fargo Securities LLC won the bid.

The bonds are due 2013 to 2032 with 3% to 5% coupons.

Proceeds will be used to fund special projects at several of the state's universities, as well as prisons, libraries and related infrastructure.

San Francisco offers up G.O.s

Another major competitive deal came out of the City of San Francisco, which brought to market $368.075 million of series 2011-R1 general obligation refunding bonds, said a pricing sheet.

The bonds (Aa2/AA/AA-) were sold competitively with Bank of America Merrill Lynch winning the bid.

The bonds are due 2012 to 2030 with 2% to 5% coupons.

Proceeds will be used to refund existing debt.

Cape Coral deal prices

In other news, the City of Cape Coral of Florida offered up $106.56 million of series 2011A water and sewer refunding revenue bonds, said a pricing sheet.

The bonds (A1/A-/A) were sold through Morgan Stanley & Co. LLC and Bank of America Merrill Lynch. The bonds are due 2013 to 2026 with term bonds due in 2031 and 2042. The serial coupons range from 3% to 5%. The 2031 bonds have a split maturity with a 4.6% coupon priced at 99.865 and a 5% coupon priced at 103.056. The 2042 bonds have a 5% coupon priced at 101.158.

Proceeds will be used to refinance commercial paper notes.

Omaha power deal set

Looking at upcoming offerings, the Omaha Public Power District of Nebraska announced Wednesday that it plans to price $300 million of series 2011 electric system revenue bonds, said a preliminary official statement.

The deal includes $150 million of series 2011B bonds and $150 million of series 2011C bonds.

The bonds (Aa1/AA/) will be sold on a negotiated basis with Bank of America Merrill Lynch and J.P. Morgan Securities LLC as the lead managers.

Proceeds will be used to fund capital expenditures and refund debt.

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