Munis close mixed as new deals hit the market; Chicago Board of Education sells $398.4 million

By Sheri Kasprzak

New York, Oct. 12 - Municipals rounded out the day mixed, with yields all over the place, said market insiders. New deals hit the market on Wednesday, but the market struggled to find a direction, said one trader.

"Treasuries have been pushing us down in spots, but it's really been tough to find a direction," he said.

"Pricing [of new deals] is all over the place, and that's part of the reason we're basically mixed."

Seven-year yields were the hardest hit, closing up almost 11 basis points. Five-year bonds were also knocked around, with yields seen up by almost 8 bps. Thirty-year bonds closed down almost 3 bps, and the rest of the market was only slightly firmer or slightly softer.

In other municipals news, the Harrisburg, Pa., city council voted to file for bankruptcy on Tuesday night. Even so, the proper procedures were not followed, according to the city attorney, and the filing will not be binding, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

"The Pennsylvania senate is scheduled to take up a bill next week which would allow the state to place the city into receivership, essentially forcing it to follow the state's proposed recovery plan," Schankel wrote in a report.

"The governor has said he will sign such a bill."

Chicago BOE brings debt

Heading up Wednesday's primary action, the Chicago Board of Education priced $398.415 million of series 2011A unlimited tax general obligation bonds, said a pricing sheet.

The bonds (Aa3/AA-/A+) were sold through Jefferies & Co. Inc.

The bonds are due 2039 and 2041. The 2039 bonds have a 5.5% coupon. The 2041 bonds have a split maturity with a 5% coupon and a 5.25% coupon. The full pricing details were not immediately available.

Proceeds will be used to fund capital improvements to school facilities throughout the district.

Tennessee sells taxable G.O.s

Also during the session, the State of Tennessee sold $228.985 million of series 2011C taxable G.O. bonds, said a pricing sheet.

The bonds were sold through senior managers J.P. Morgan Securities LLC and Goldman Sachs & Co.

The bonds are due 2012 to 2026 with a term bond due in 2031. The serial coupons range from 0.5% to 3.928%. The 2031 bonds have a 4.182% coupon and priced at par.

Proceeds will be used to fund capital projects and refund the state's series 2002B, 2003B and 2005A bonds.

New York prices adjustable-rate demand bonds

In other news, the City of New York sold Wednesday $126.665 million of series 2012D-3 tax-exempt adjustable-rate demand bonds, said a pricing sheet.

The bonds (//AA) were sold competitively with BNY Mellon Capital Markets LLC winning the bid.

The bonds are due Oct. 1, 2039 and bear interest initially at the daily rate.

Proceeds will be used to fund capital expenditures.

California deal ahead

Looking to Thursday's primary activity, the California State Public Works Board is poised to come to market with $450 million of series 2011 tax-exempt lease revenue bonds.

The bonds will be sold on a negotiated basis with Citigroup Global Markets Inc. as the lead manager.

Proceeds will be used to finance capital improvements.

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