Municipals slip slightly despite healthy primary action; Texas brings $9.8 billion of TRANs

By Sheri Kasprzak

New York, Aug. 21 - Municipals were seen slightly weaker despite a healthier spate of new offerings, market insiders said.

Treasuries saw some weakness early in the session, dragging munis down with them. Despite a recovery for Treasuries, municipals just couldn't recover.

"Retail seems to be reluctant," said one trader reached in the afternoon.

"We are dealing with a bearish market, and some of the new issues now are being priced accordingly."

Secondary was relatively light.

"There's just not enough to get the retail investors excited, and that could be why yields didn't move along with Treasuries," the trader noted.

Meanwhile, in primary, the State of Texas came to market with $9.8 billion of series 2012 tax and revenue anticipation notes, said a pricing sheet.

Texas offer details

The notes from Texas (MIG 1/SP-1+/F1+) were sold competitively.

J.P. Morgan Securities LLC won $5.22 billion of the notes. Citigroup Global Markets Inc. won $2 billion of the notes, Bank of America Merrill Lynch won $1.05 billion and Wells Fargo Securities LLC took $1 billion. RBC Capital Markets LLC took $325 million and Piper Jaffray & Co. won $100 million. Goldman, Sachs & Co. won $80 million and Morgan Stanley & Co. took $25 million.

The weighted average net interest cost came in at 0.22529938776%.

The notes are due Aug. 30, 2013 and bear interest at 2.5% priced at 102.262.

Proceeds will be used to finance capital expenditures for the state ahead of the collection of taxes and revenues during the 2012-2013 fiscal year.

The state came to market in August of 2011 with $9.8 billion of notes as well. The weighted net interest cost for that offering came in at 0.27306606414%. Those notes also have a 2.5% coupon and were priced at 102.201.

New Jersey Turnpike bonds

Later in the week, a major deal from the New Jersey Turnpike Authority is slated to price through Citigroup Global Markets Inc. and Goldman, Sachs & Co.

The bonds (A3/A+/A) will price on Thursday.

The bonds are due 2019 to 2030, and proceeds from the deal will refund the authority's series 1991C-D, 2003A and 2009C-E revenue bonds.

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