Municipals close unchanged as market awaits word from Fed; Rhode Island brings $168.82 million

By Sheri Kasprzak

New York, Aug. 25 - Municipals were largely unmoved on Thursday as the market waited to see what the Federal Reserve has to say about the nation's economy, said market insiders.

"There's really not a lot moving," said one trader of the secondary market.

"Everyone's pretty much waiting for some direction from the Fed [on Friday]."

Federal Reserve chairman Ben Bernanke is slated to make a statement on Friday.

Meanwhile, some repricings were necessary following a dip in Treasuries, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

The State of Rhode Island priced $168.815 million of series 2011 consolidated capital development loan general obligation bonds, and they were repriced at yields 50 basis points to 75 bps above the AAA scale, Schankel reported Thursday.

In addition, the Ohio Building Authority lifted yields on its $144.055 million offering of series 2011 state facilities refunding bonds, Schankel noted.

"Next week's pre-Labor Day new issue calendar is very light," Schankel noted.

"Reinvestment flows in the summer months pushed demand, but the pace of redemptions and maturing bonds will slow in September to $12.5 billion, about half of the monthly average for June through August. Another sign of slackening demand is the fourth week of municipal mutual fund outflows in the week ending Aug. 17."

Rhode Island brings bonds

As previously mentioned, Rhode Island came to market with $168.815 million of consolidated capital development loan G.O. bonds.

The offering included $145.035 million of series 2011A bonds and $23.78 million of series 2011B refunding bonds, said a pricing sheet.

The 2011A bonds are due 2012 to 2031 with 0% to 5.5% coupons. The 2011B bonds are due 2012 to 2015 with 2% to 5% coupons.

The bonds were sold through senior managers J.P. Morgan Securities LLC and Barclays Capital Inc.

Proceeds will be used to refund existing debt and to fund loans to local governments for clean water and other development projects.

Ohio building bonds price

Elsewhere, the Ohio Building Authority sold $144.055 million of series 2011 state facilities refunding bonds, said a pricing sheet.

The offering included $34.2 million of series 2011A administrative building project bonds, $101.53 million of series 2011B adult correctional building project bonds and $8.325 million of series 2011C juvenile correctional building project bonds.

The 2011A bonds are due 2014 to 2024 with 4% to 5% coupons. The 2011B bonds are due 2012 to 2024 with 1.5% to 5% coupons. The 2011C bonds are due 2014 to 2024 with 3% to 4% coupons.

The bonds (Aa2/AA/AA) were sold through Morgan Stanley & Co. LLC.

Proceeds will be used to currently and advance refund existing Ohio Building Authority debt.

Austin sells debt

Moving to the competitive market, the City of Austin, Texas, priced Thursday $137.69 million of series 2011 certificates of obligation and public improvement bonds (/AAA/AAA), said a pricing sheet.

The offering included $51.15 million of series 2011 certificates of obligation, $78.09 million of series 2011A tax-exempt public improvement bonds and $8.45 million of series 2011B taxable public improvement bonds.

The 2011 certificates are due 2012 to 2028 with term certificates due in 2030, 2033, 2036, 2039 and 2041. The serial coupons range from 3% to 5%. The 2030 certificates have a 4% coupon and priced at 99.34, and the 2033 certificates have a 4% coupon and priced at 97.852. The 2036 certificates have a 4.125% coupon and priced at 98.087, and the 2039 certificates have a 4.25% coupon and priced at 99.188. The 2041 certificates have a 4.25% coupon and priced at 98.332.

The 2011A bonds are due 2012 to 2029 with a term bond due in 2031. The serial coupons range from 2% to 4%. The 2031 bonds have a 4% coupon and priced at 98.645.

The 2011B bonds are due 2016 to 2031 with 5.25% coupons across the board.

Proceeds will be used to finance municipal improvements and refund existing obligations.

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