Munis flat; $5 billion of new deals expected ahead of holiday; California G.O. bonds to price

By Sheri Kasprzak

New York, Aug. 26 - Municipals ended a quiet session unchanged, market sources reported. Recent headlines and investor jitters kept municipals flat even as Treasuries rallied.

Treasuries got a boost from weak durable goods orders data for the month of July. The 30-year bond yield was down 3 basis points to close out the session at 3.766%, and the five-year yield was down 3.5 bps at 1.592%. The 10-year yield was down 2.5 bps at 2.788%.

About $5 billion of long-term bonds are set to come to market this week, and about $3.5 billion of that will price on a negotiated basis, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC.

Amid the larger competitive deals is a $7.2 billion offering of short-term notes from the State of Texas that is slated to price on Tuesday.

Those notes (MIG 1/SP-1+/F1+) are due Aug. 28, 2014 and will be used to fulfill operating cash shortfalls during the coming fiscal year.

California deal set

Among the larger long-term competitive deals, the State of California is set to price $764,025,000 of series 2013 various purpose general obligation bonds.

According to the California Treasurer's Office, the state typically sells debt over $1 billion in negotiated offerings and sells smaller deals competitively.

The offering will be conducted in two tranches, including $205 million of series 2013 G.O. bonds and $559,025,000 of series 2013 G.O. refunding bonds.

Proceeds will be used to fund certain capital projects, repay outstanding commercial paper and current refund debt for a debt service savings.

Atlanta to bring debt

Another major offering during the week comes from the City of Atlanta, which will price $568,735,000 of series 2013 water and wastewater revenue refunding bonds in two tranches.

The offering includes $328,735,000 of series 2013A bonds and $240 million of series 2013B bonds.

Wells Fargo Securities LLC is the senior manager for the 2013A bonds, and Goldman Sachs & Co. is the lead manager for the 2013B bonds.

Proceeds will be used to refund the city's series 1999A, 2001A and 2004 water and wastewater revenue bonds.

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