Muni yields end unchanged with firmer tone; Puerto Rico Sales Tax Financing sells $1.57 billion

By Sheri Kasprzak

New York, June 22 - Municipal yields were largely unmoved on Tuesday, but the tone of the market was firmer, a trader reported.

"We're not really moving that much, but there is a firmer tone," he said.

"We seem to be stuck in a bit of a rut. We'll make a gain here and then lose it. We're following Treasuries pretty closely these days, so whatever Treasuries do, we pretty much go that way, too."

Treasuries were also mostly flat Tuesday.

Over in secondary, the Modesto Irrigation District Financing Authority of California's recently priced series 2010B revenue bonds were moving. The 5% 2032 bonds were seen at 4.861%. The bonds priced Thursday at 5.2%.

Elsewhere, the State of Illinois' series 2010-4 general obligation bonds were trading. The 7.1% 2035s were seen at 6.827% after pricing at par.

Puerto Rico bonds price

Moving to the primary market, the heavy calendar was led by the Puerto Rico Sales Tax Financing Corp.'s $1.572 billion in series 2010 revenue bonds.

The offering included $1.4 billion in series 2010C sales tax first subordinate revenue bonds, $80 million in series 2010D sales tax first subordinate Build America Bonds and $92 million in series 2010E sales tax subordinate recovery zone economic development bonds.

The pricing details were not immediately available Tuesday.

Citigroup Global Markets Inc., Bank of America Merrill Lynch, J.P. Morgan Securities Inc. and Wells Fargo Securities Inc. were the senior managers.

Proceeds will be used to redeem existing refunded bonds and repay outstanding obligations.

Harris County sells TANs

Down South, Harris County in Texas sold Tuesday $450 million in series 2010 tax anticipation notes, said a pricing sheet.

The bonds (/SP-1+/F1+) were sold competitively. Barclays Capital Inc., Zions First National Bank, JPMorgan and Wells Fargo Bank, NA each took pieces of the notes.

Wells Fargo Bank took the bulk of the bonds - $210 million. The weighted true interest cost came in at 0.34182%.

"We had a good amount of interest [in the sale]," said a sellside source connected to the deal.

"We're pleased with the results. All things considered, it went well."

The sellsider noted that the county came to market with the notes after determining its capital requirements for the fiscal year.

The notes are due Feb. 28, 2011.

The coupons range from 1.5% to 2%.

First Southwest Co. was the financial adviser.

The county plans to use the proceeds to fund its capital requirements ahead of the collection of ad valorem and other taxes.

The county seat is Houston.

Texas brings G.O.s

Also in the Lone Star State, the Texas Public Finance Authority brought $325.495 million in series 2010 G.O. refunding bonds, said a pricing sheet.

The bonds (Aaa/AA+/AAA) were sold Tuesday through Barclays Capital.

The offering included $179.18 million in series 2010A bonds and $146.315 million in series 2010B bonds.

The 2010A bonds are due 2013 to 2030 with 4% to 5% coupons. The 2010B bonds are due 2013 to 2018 with coupons from 3% to 5%.

The proceeds will refund a portion of the authority's commercial paper notes and G.O. bonds.

The authority, based in Austin, Texas, was formerly known as the Texas Public Building Authority. The authority constructs or acquires state office buildings.

NYC water bonds price

Elsewhere, the New York City Municipal Water Finance Authority sold Tuesday $400 million in fiscal 2010 series GG water and sewer second general resolution revenue bonds, said a term sheet.

The bonds (Aa2/AA+/AA+) were sold through lead manager Morgan Keegan & Co. Inc.

The bonds are due June 15, 2042 with split maturities. The bonds have a 5.724% coupon and a 6.124% coupon, both priced at par.

Proceeds will be used to redeem existing commercial paper notes and finance improvements to the city's water and sewer system.

Massachusetts sells $250 million

In other primary news, the Commonwealth of Massachusetts sold Tuesday $250.45 million in series 2010B consolidated G.O. bonds, said a pricing sheet.

The bonds were sold through Bank of America Merrill Lynch.

The bonds are due 2011 to 2020 with coupons from 2% to 5%.

In reoffering, the 4% 2014 bonds were seen at 1.51%, unchanged from pricing. The 2% 2013s were seen at 1.15%, also unchanged from pricing.

Proceeds will be used to finance capital projects.

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