Municipals sell off; Baltimore bonds out 60 bps; Colorado, Texas State University plan deals

By Cristal Cody

Tupelo, Miss., Dec. 17 - Municipal bonds widened in trading on Monday in a surprise sell-off, traders said.

"It's a pretty good sell-off today," one trader said.

Another trader said it was the "biggest one I've seen in a long time."

Municipal bonds traded out 2 points on the day, while other issues moved out in the secondary market.

Baltimore's 75th issue Metropolitan District 3% bonds due 2033 (Aaa) that priced on Nov. 30 continued to widen on Monday.

"They came two weeks ago at a 266 [bps] yield - they're trading at 326 [bps] today," a trader said.

Puerto Rico Public Buildings Authority's 5.25% revenue bonds due 2032 widened following Moody's Investors Service's downgrade of Puerto Rico on Thursday to Baa3.

"Puerto Rico is getting hammered; it's down 5 to 7 points," a trader said.

In other trading on Monday, Virginia Housing Development Authority's series 2012C commonwealth mortgage bonds (Aaa/VMIG1/AAA/A-1+/) that priced on Wednesday at par traded lower to 97, a trader said.

"There was a lot of supply last week and not all of it went away, especially the low-coupon stuff," the trader said.

A handful of new deals are expected early in the week with activity winding down by Friday ahead of the Christmas holiday, market sources said.

One offering is expected from the State of Colorado, which is set to price $160 million of tax and revenue anticipation notes through a competitive sale on Wednesday.

Colorado to sell $160 million

Colorado intends to price $160 million of tax and revenue anticipation notes through a competitive sale on Wednesday, according to a notice of sale.

The series 2012C notes for the education loan program are due June 27, 2013.

RBC Capital Markets, LLC is the state's financial adviser.

The proceeds will be used to make program loans to about 16 districts to alleviate temporary general fund cash flow deficits currently forecast by each district during fiscal year 2012-13.

Texas State University on tap

An offering also is on the calendar from the Board of Regents of Texas State University System, which plans to sell $99,275,000 of revenue financing system revenue and refunding bonds, according to a preliminary official statement.

The series 2013 bonds (Aa2//AA) have serial maturities from 2013 through 2043.

Barclays is the senior manager.

Proceeds will be used to acquire, purchase, construct, improve, renovate, enlarge or equip property, buildings, facilities, roads and related infrastructure for members of the revenue financing system, to refund a portion of the system's outstanding series 2004 revenue and refunding bonds and to fund certain capitalized interest for the bonds.

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