Munis close firmer as primary supply continues to pour in; Florida DOT brings $150.17 million

By Sheri Kasprzak

New York, June 23 - As primary offerings continued to distract investors from the secondary side of the market, yields were once again firmer, with most of the improvement seen in the belly of the curve, said market insiders.

"Right around 10 years is where we're seeing the most [improvement]," said a trader reached Thursday afternoon.

"Ten to 15 years, yields are down about 2 bps. Short is mostly flat. In spots, you'll see some firmness, maybe a basis point or a little more."

Despite the boost in primary market activity during this week, new-deal action should taper off in the week ahead, said Alan Schankel, managing director at Janney Montgomery Scott LLC.

"Next week's new issue calendar is light at about $3.5 billion, perhaps reflecting anticipated pre-holiday sluggishness and quarter-end apathy, but June will finish with more than $20 billion in new deals, the highest volume of the month," Schankel wrote in a report Thursday.

Florida DOT drives deal

Amid that heavy primary action was a competitive offering from the Florida Department of Transportation. The DOT priced $150.165 million of series 2011A turnpike revenue bonds, said a pricing sheet.

The bonds (Aa3/AA-/AA-) were sold competitively with Wells Fargo Securities LLC winning the bid.

The bonds are due 2012 to 2034 with term bonds due in 2036, 2038, 2039 and 2041. The serial coupons range from 3.25% to 5%. The 2036 bonds have a 5% coupon priced at 104.379. The 2038 bonds have a 4.75% coupon priced at 98.65, and the 2039 bonds have a 4.75% coupon priced at 98.476. The 2041 bonds have a 5% coupon priced at 103.971.

Proceeds will be used to finance the acquisition and construction of turnpike projects, including lane widening of the mainline in Orange County, interchange and ramp improvements, electronic toll collection improvements and canal protection projects on the mainline, as well as to refund the department's series 2003C bonds.

Texas sells college bonds

Elsewhere during the session, the State of Texas priced $145.67 million of series 2011 college student loan general obligation bonds, said a pricing sheet.

The offering included $118.65 million of series 2011A AMT G.O. bonds and $27.02 million of series 2011B AMT G.O. refunding bonds.

The 2011A bonds are due 2015 to 2026 with term bonds due 2031 and 2036. The bonds all have 5% coupons. The 2031 bonds have a 5% coupon priced at 104.261, and the 2036 bonds have a 5% coupon priced at 101.431.

The 2011B bonds are due 2012 to 2018 with 2% to 5% coupons.

J.P. Morgan Securities LLC was the senior manager for the bonds (Aaa/AA+/). The co-managers were Bank of America Merrill Lynch, Southwest Securities Inc. and Wells Fargo.

Proceeds will be used to fund student loans and to refund the state's series 2002 college student loan G.O. bonds.

Providence Health deal prices

Also in the primary, the Washington Health Care Facilities Authority sold $93.28 million of series 2011B revenue bonds for Providence Health & Services, said a pricing sheet.

The bonds (Aa2/AA-/AA-) were offered through Bank of America Merrill Lynch and Goldman Sachs & Co.

The bonds are due 2012 to 2021 with 2% to 5% coupons.

Proceeds will be used to refund Providence Health's series 2001A bonds.

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