Muni yields weaken at top of supply-starved week; Waterloo school district sells $69.3 million

By Sheri Kasprzak

New York, March 28 - Despite a slow day for primary action and an anticipated slow week for new-issue volume, municipal yields were yet again softer with yields seen higher by 2 to 3 basis points across the curve, traders reported.

"There's just no demand," one trader said. "Even if there was a supply out there, there's no trading."

In fact, another trader pointed out that the scant number of new deals in the pipeline are struggling to achieve solid pricing terms, so more supply might force yields even higher.

"It's gotten to the point that even low supply isn't helping anymore," he noted.

Competitive offerings make up the vast majority of new deals coming to market in the week ahead. It's been a trend, with several new deals pricing competitively over the past few weeks.

Many issuers have pointed out that the costs associated with pricing on a negotiated basis can't be justified and that competitive sales mean more attractive pricing terms.

Recently, the Canyons School District of Utah came to the competitive market with $68 million of series 2011 general obligation bonds.

The district's chief financial officer, Keith Bradford, told Prospect News that market conditions were a driving factor in its decision to go competitively.

"With the current market conditions and situations happening worldwide, we felt that a competitive bid at this time would be in our best interest," Bradford said.

As previously reported, the bonds are due 2012 to 2031 with coupons from 2% to 4.5%.

The district intends to use the proceeds from the sale, which was conducted March 22, to construct a new high school and to make repairs and renovations to existing schools.

Anne Arundel deal ahead

Among the major competitive offerings in the week ahead, Anne Arundel County of Maryland is scheduled on Wednesday to price $179.59 million of series 2011 G.O. bonds, including $131.99 million of series 2011 consolidated general improvements bonds and $47.6 million of series 2011 water and sewer bonds.

The county intends to use the proceeds from the sale to retire its series A bond anticipation notes and to fund improvements to its water and sewer system as well as general improvements.

The county seat is Annapolis.

Temple University to price

Another deal coming up on Wednesday comes from Philadelphia's Temple University, which is slated to bring $120 million of series 2011 university funding obligations (MIG 1/SP-1+/F1+).

The obligations are due April 4, 2012, and the proceeds will be used to fund equipment expenditures and capital improvements and to refinance the university's series 2010 funding obligations.

Suffolk Water bonds to come

Also ahead on Wednesday, the Suffolk County Water Authority of New York will competitively sell $100 million of series 2011 bond anticipation notes.

The deal includes $50 million of series 2011A notes and $50 million of series 2011B notes.

Goldman Sachs & Co. is the financial adviser for the offering.

The proceeds will be used to fund capital requirements ahead of an additional bond issuance.

The authority is based in Coram.

Waterloo bonds price

Heading up Monday's primary action, the Waterloo Community School District of Iowa brought $69.305 million of series 2011 school infrastructure sales, services and use tax revenue refunding bonds, said a pricing sheet.

The deal included $52.925 million of series 2011A bonds and $16.38 million of series 2011B bonds.

The 2011A bonds are due 2012 to 2030 with coupons from 4% to 5.25%. The 2011B bonds are due July 1, 2025 and have a 5.85% coupon priced at par.

The bonds (/A/) were sold competitively, but calls to the issuer for the winning bidder and other comments were not returned by press time Monday.

Proceeds will be used to retire the district's series 2009 bond anticipation notes.

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