Municipals close unchanged in quiet session; New York City Transitional sells $875 million

By Sheri Kasprzak

New York, Feb. 2 - Municipals were largely flat on Wednesday as the week's largest primary offerings came to market, insiders reported.

"It looks flat," said one trader. "There's not a lot going on [in secondary]. Pretty quiet day."

The market received a bit of good news on Wednesday following weeks of bleak mass media reports of potential bankruptcies and defaults. Alan Schankel, managing director with Janney Montgomery Scott LLC, said new data released from the Rockefeller Institute of Government indicates that overall state and local tax revenues continue to rise. Revenues were up 6.9% in the last quarter of 2010.

"Not all states are seeing improvement, with the report noting that seven had lower revenues, year over year, including New Jersey (down 0.4%), Virginia (down 0.3%) and Louisiana (down 5.4%)," Schankel said.

NYC Transitional bonds price

Moving to primary action, the New York City Transitional Finance Authority sold $875 million of series 2011D future tax secured bonds through Goldman Sachs & Co., said a pricing sheet.

The bonds are due 2013 to 2031 with term bonds due in 2035. The serial coupons range from 2.5% to 5.25%. The 2035 bonds have a split maturity with a 5% coupon priced at 97.275 and a 5.125% coupon priced at 98.977.

The 2011D-2 bonds are due 2011 to 2020 with coupons from 2.62% to 4.38%, all priced at par.

Proceeds will be used for capital expenditures for the city.

North Carolina brings G.O.s

Elsewhere, the State of North Carolina came to market with $500 million of series 2011A capital improvement limited obligation bonds on Wednesday, said a pricing sheet.

The bonds (Aaa/AA+/AAA) were sold competitively with Wells Fargo Securities LLC winning the bid. FirstSouthwest Co. was the financial adviser.

The bonds are due 2012 to 2031 with coupons from 3% to 5.25%.

"Competitive sales result in the lowest financing costs when there is good demand in the market for your debt, as there is with North Carolina," said Heather Strickland, spokesman for the state treasurer's office, when asked about the state's decision to sell its G.O. bonds competitively.

Proceeds will be used to fund improvements to higher education facilities, purchase land and make improvements to other state facilities.

Port of Seattle deal ahead

Moving to upcoming offerings, the Port of Seattle in Washington is expected to sell $106.99 million of series 2011 limited tax G.O. bonds and G.O. refunding bonds, said a preliminary official statement.

The sale includes $30.305 million of series 2011 taxable G.O. bonds and $76.685 million of series 2011 AMT G.O. refunding bonds.

The bonds (Aa1/AAA/AAA) will be sold on a negotiated basis with Barclays Capital Inc. as the senior manager.

The G.O. bonds are due 2014 to 2015. The G.O. refunding bonds are due 2011 to 2025.

Proceeds will be used to reimburse the port for the construction of the Rail Corridor and to refund the port's series 2000B bonds.

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