Munis continue to slide as Treasuries fall, investors avoid market; Temple University prices

By Sheri Kasprzak

New York, March 31 - Municipals once again hit a rough spot as Treasury yields rose following an auction, traders said. The lack of demand by investors has also left the market weaker as supply continues to dwindle.

"It's another off day," said one trader. "We're partly following Treasuries, and we're partly just plain weak."

Investors are avoiding the market, the trader said, partly due to a fear of having too much exposure to municipals in a downturned economy.

Yields rose by 4 to 9 basis points across the yield curve, with the belly of the curve getting hit the hardest, market insiders reported.

Supply remains extremely light, but some major offerings are apparently on the horizon. The North Texas Tollway Authority is on deck to bring $1.028 billion of bonds and notes in the coming month. The New York City Transitional Finance Authority will reportedly come to market with $500 million of future tax secured bonds. The City of Chicago has been sitting on the sidelines with its planned $1 billion offering of airport bonds for Chicago O'Hare International Airport, but pricing conditions aren't optimal right now, and so some issuers are holding off.

"There's stuff coming up, but some [issuers] are holding back because they're not going to get the best pricing right now," said the trader.

Temple sells obligations

In the primary market, Temple University of Philadelphia priced $120 million of series 2011 university funding obligations, said a pricing sheet.

The obligations (MIG 1) are due April 4, 2012 and have a 1% coupon priced at 101.093.

Proceeds will be used to fund equipment expenditures and capital improvements and to refinance the university's series 2010 funding obligations.

Anchorage notes price

Elsewhere, the Municipality of Anchorage, Alaska, priced $112 million of series 2011 general obligation tax anticipation notes on Thursday, said a pricing sheet.

The notes (/SP-1+/) were sold competitively.

The notes are due Dec. 29, 2011 and have a 1.5% coupon priced at 100.882.

Proceeds will be used to fund capital requirements ahead of the collection of taxes.

NYC Transitional deal coming

Looking ahead to upcoming offerings, the New York City Transitional Finance Authority is expected to price $500 million of series 2011future tax secured subordinated bonds, said a preliminary official statement.

The offering includes $483 million of series 2011E bonds and $17 million of series 2011F bonds.

The bonds will be sold through Wells Fargo Securities LLC.

The 2011E bonds are due 2012 to 2025, and the 2011F bonds are due 2011 to 2025.

Proceeds will be used to redeem existing future tax secured bonds.

Oklahoma student loan deal set

Also coming up, the Oklahoma Student Loan Authority is set to price $213.5 million of series 2011-1 taxable Libor Oklahoma student loan bonds and notes, said a preliminary official statement.

The bonds (/AAA/AAA) will be sold through Merrill Lynch.

The maturity date is June 1, 2040.

Proceeds will be used to acquire eligible student loans from lenders or holders in the authority's network as well as to refund the authority's series 2008I-A1 variable-rate bonds.

Based in Oklahoma City, the authority provides and services student loans.

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