Munis seen firmer ahead of busy day for primary; New York City brings $633.33 million bonds

By Sheri Kasprzak

New York, March 8 - Municipals were slightly improved on Tuesday with a bit more in the way of primary offerings as the City of New York came to market with $633.325 million of general obligation bonds.

"We're a little firmer overall," said one trader.

"Probably a basis point or two across the curve. I think we're still waiting for investors in a way. Supply is still low, even though it is getting some better, but even at that, investors are pulling back."

Meanwhile, the supply-starved market got a shot in the arm thanks to the New York offering.

The city sold $386.975 million of series 2011I-1 tax-exempt bonds, $79.4 million of series 2011I-2 taxable bonds and $166.95 million of series 2011I-3 taxable bonds on Tuesday.

The 2011I-1 bonds were sold on a negotiated basis with Bank of America Merrill Lynch as the senior manager.

The 2011I-1 bonds are due 2011 and 2014 to 2020 with coupons from 2% to 5%. The 3% 2011 bonds were not reoffered.

The 2011I-2 and 2011I-3 bonds were sold competitively. The 2011I-2 bonds are due Aug. 1, 2011 and have a 1.5% coupon priced at par. The 2011I-3 bonds are due 2012 to 2014 with 0.65% to 2.07% coupons, all priced at par.

Piper Jaffray & Co. was the winning bidder for the series 2011I-2 bonds, and J.P. Morgan Securities LLC won the series 2011I-3 bonds.

Proceeds will be used to redeem the city's series 2008J-13 and series 2008J-14 variable-rate bonds.

Georgia road bonds ahead

The New York deal was one of several larger offerings headed to market during the week, many of them being sold competitively.

"It depends upon the issuer, but some are finding that negotiated makes little sense right now," said one sellsider.

"Some are required [by law], but competitive is a good way to ensure you get the best pricing, and that's important given current conditions."

Leading Wednesday's competitive calendar is the Georgia State Road and Tollway Authority's $355.135 million sale of series 2011 revenue refunding bonds (//AAA).

That deal includes $203.46 million of series 2011A bonds and $151.675 million of series 2011B bonds.

Public Resources Advisory Group is the financial adviser.

Proceeds will be used to refund the authority's series 2003 bonds.

Maryland preps sale

Also coming up on Wednesday, the State of Maryland will price $485 million of series 2011G.O. bonds (Aaa/AAA/AAA). Part of the deal will be sold on a negotiated basis and part will be sold on a competitive basis.

The offering is comprised of $100 million of first series A tax-exempt bonds, $378.48 million of first series B tax-exempt bonds and $6.52 million of first series C taxable qualified energy conservation bonds.

The first series A bonds will be sold through senior manager Siebert Brandford Shank & Co. LLC.

The first series B and first series C bonds will be sold on a competitive basis with Public Financial Management Inc. as the financial adviser.

Proceeds will be used to fund various capital projects, capital grants for local governments and matching fund loans and grants for local governments, nonprofits, hospitals and other entities. Proceeds from the first series C bonds will be used to assist local educational facilities to undertake energy conservation projects in schools.

Puerto Rico sale set

In other deals scheduled for Wednesday, the Commonwealth of Puerto Rico is slated to bring $250 million of series 2011C public improvement refunding bonds (A3/BBB/BBB+) to market through Morgan Stanley & Co. Inc. and Barclays Capital Inc.

Proceeds will be used to refund existing debt.

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