Munis close unchanged as market recovers after Irene; only $1.45 billion of new bonds expected

By Sheri Kasprzak

New York, Aug. 29 - Municipals kicked off the week without much action following the weekend's tropical storm. Very little trading and light primary activity left little to move yields in any direction, market insiders reported.

"I'd call it flat," said one trader.

"There's nothing trading. I suspect it will probably be this way most of the week. There's not a lot coming ahead of Labor Day. I hope trading does pick up as the week moves along."

With just $1.45 billion of primary offerings slated for the week before Labor Day, the market is preparing for a lull.

Issuers will be assessing just how much damage Irene caused, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC.

"Even though millions were evacuated and millions more remain without power, it will take some time to assess all of the damage from Hurricane Irene and its aftermath," Kozlik wrote Monday morning.

"The key issue now is how strongly municipalities recover from flooding and infrastructure damage. Federal and state funds will likely help the effort, but billions of dollars of damage and economic loss will not go unnoticed. That said, as of now, we are not expecting any type of significant widespread credit deterioration, even though flooding may continue through the week and local officials have yet to fully evaluate the state of affairs in the worst-hit communities."

New York LGA deal ahead

Heading up the week's light action, the New York Local Government Assistance Corp. is scheduled to bring $191.18 million of series 2011A subordinate-lien refunding bonds via competitive bid on Tuesday.

The bonds are due 2012 to 2021, and proceeds from the offering will be used to refund the corporation's series 2008B-BV2 bonds.

Tampa to price

Another major offering this week comes on Wednesday from the City of Tampa. The city is slated to price $128.855 million of series 2011 water and sewer systems improvement and refunding revenue bonds (Aa1/AA+/AA+).

The bonds will be sold through senior manager Wells Fargo Securities LLC.

Proceeds will be used to prepay outstanding notes, refund the city's series 2001A water and sewer revenue bonds and fund various sewer capital improvements included in the city's five-year capital improvement program.

New York Thruway deal set

The next major offering expected to price in the muni market comes from the New York State Thruway Authority, which is gearing up to bring $350 million of series 2011A state personal income tax revenue bonds on Sept. 6, said a preliminary official statement.

The bonds will be sold on a negotiated basis with Siebert Brandford Shank & Co. LLC as the senior manager.

The bonds are due 2012 to 2026.

Proceeds will be used to make grants to reimburse municipalities and other project sponsors for highway, bridge and multi-modal projects.

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