Muni yields end unmoved in heavy day for pricings; Texas Transportation prices $1.5 billion

By Sheri Kasprzak

New York, July 27 - Municipal yields held steady with a firmer tone on Tuesday as primary activity took off. Secondary action, however, floundered a bit as investors turned their attention to several large offerings.

"It's been fairly quiet over here [in secondary]," said one trader.

"A lot of folks are buying up new issues, so we're competing with that. So far this year, it's either been reinvestments or new issues, but very little else."

The Texas Transportation Commission dominated the day's activity with a $1.497 billion sale of series 2010B state highway fund first-tier revenue Build America Bonds (Aaa/AAA/).

The sale included $292.955 million in bonds due April 1, 2026 and $1,204,045,000 in bonds due April 1, 2030, said a pricing sheet. The 2026 bonds have a 5.028% coupon priced at par. The 2030 bonds have a 5.178% coupon also priced at par.

According to Alan Schankel, managing director and head of fixed-income research and strategy with Janney Montgomery Scott LLC, the initial pricing levels in the 16- and 20-year maturities were for spreads of 100 and 115 basis points, respectively, compared to 30-year Treasuries.

Goldman, Sachs & Co. was the senior manager.

The commission intends to use the proceeds to construct and improve state highways.

NYC sells bonds

In other news, the City of New York brought $800 million in series 2011 general obligation bonds, said a term sheet. The city plans to use the proceeds to finance capital improvements.

The offering included $165 million in series 2011A bonds and $635 million in series 2011B bonds.

The 2011A bonds are due 2011 to 2021 with coupons from 2% to 5%. The 2011B bonds are due 2012 to 2033 with a term bond due 2037. The serials have coupons from 2% to 5%. The 2037 bonds have a 4.25% coupon priced at 97.798.

Barclays Capital Inc. was the senior manager for the bonds (Aa2//AA).

Florida water bonds price

Looking to the competitive calendar, the Florida Water Pollution Control Financing Corp. priced Tuesday $225 million in series 2010A water pollution control revenue bonds, said a term sheet.

The bonds (Aaa/AAA/AAA) priced competitively with Bank of America Merrill Lynch winning the bid.

The bonds are due 2011 to 2030 with coupons from 3.5% to 5%.

Proceeds will be used to finance water pollution control projects.

Bank of America was busy in the competitive market. The bank also won $72.64 million in series 2010 G.O. bonds issued by Baltimore County in Maryland.

The sale included $13.255 million in consolidated improvement district refunding bonds and $59.385 million in metropolitan district refunding bonds to finance capital projects.

The consolidated improvement bonds are due 2011 to 2022 with coupons from 2.5% to 4%. The metropolitan district bonds are due 2011 to 2030. The coupons range from 2% to 5%.

Minneapolis airports deal prices

In other news, the Minneapolis-St. Paul Metropolitan Airports Commission sold Tuesday $135.255 million in series 2010 senior airport revenue bonds, said a pricing sheet.

The offering included $61.595 million in series 2010A bonds and $73.66 million in series 2010B bonds.

The 2010A bonds are due 2028 to 2030 with a term bond due 2035. The serial coupons range from 4% to 5%. The 2035 bonds have a 5% coupon priced at 103.635.

The 2010B bonds are due 2012 to 2028 with coupons from 3% to 5%.

Barclays Capital and Piper Jaffray & Co. were the senior managers.

Proceeds will be used to finance capital improvements and repay existing commercial notes.

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