Muni yields get another boost from Treasuries rally; Texas Transportation brings $1 billion

By Sheri Kasprzak

New York, Sept. 22 - Municipal yields fell for the second straight session, boosted in part by a Treasury rally, said a trader.

"We're strong in parts [of the curve] by 5, 6 basis points," he said.

"It seems like the intermediate bonds are benefitting the most, but short and long bonds are moving along with Treasuries, too."

Meanwhile, the secondary market faltered, the trader said, as investors sank their teeth in to a healthy supply of new offerings Wednesday.

"We're really waiting for new stuff," he said.

"Right now, the market is overflowing with new offerings, so there's not a lot going on in secondary."

Heading up the glut of primary action on Wednesday was a $1 billion sale of series 2010 Texas highway general obligation bonds (Aaa/AA+/AAA) from the Texas Transportation Commission. The bonds were sold in two tranches.

Kelli Petras, spokeswoman for the commission, told Prospect News that the full terms of the deal were not immediately available but would be available Thursday.

A sellsider connected to the offering said in a recent interview that the commission had planned to take advantage of low yields and excellent market conditions to bring their bonds to market. The commission has several highway improvement projects slated in the months ahead, the source noted.

The offering included series 2010A taxable bonds and series 2010B tax-exempt bonds. The terms for the taxable portion were not available. The 2010B bonds are due 2012 to 2018 with coupons from 2% to 5%.

J.P. Morgan Securities Inc. was the senior manager for the offering.

Proceeds will be used to pay for or reimburse the state for highway improvement costs.

San Diego flies bonds

Elsewhere during the session, the San Diego County Regional Airport Authority priced $555.895 million in series 2010 subordinated airport revenue bonds (A2/A/) on Wednesday, according to term sheets.

The offering was comprised of $313.29 million in series 2010A non-AMT bonds, $27.145 million in series 2010B non-AMT bonds and $215.46 million in series 2010C Build America Bonds.

The 2010A bonds are due 2014 to 2030 with term bonds due 2034 and 2040. The serial coupons range from 4% to 5%. Both the term bonds have 5% coupons but were not reoffered.

The 2010B bonds are due 2011 to 2030 with term bonds due 2032 and 2040. The serial coupons range from 2% to 5%. The 2032 bonds have a 4.5% coupon priced at par. The 2040 bonds have a split maturity with a 4.75% coupon priced at par and a 5% coupon priced at 103.342.

The 2010C bonds are due July 1, 2040 and have a 6.628% coupon priced at par.

Siebert Brandford Shank & Co. LLC and JPMorgan were the lead managers.

Proceeds will be used to finance capital improvements at San Diego International Airport and to refund its commercial paper notes.

N.M. bonds price

In other news, the New Mexico Finance Authority brought to market $427.645 million in series 2010B senior lien refunding revenue bonds, said a term sheet.

The bonds (Aa1/AA+/) were sold on a negotiated basis with Morgan Stanley & Co. Inc. as the lead manager.

The bonds are due 2012 to 2024 with coupons from 3% to 5%.

Proceeds will be used to refund the authority's series 2002A, 2002C, 2002D and 2004A bonds.

Based in Santa Fe, the authority provides funding for a variety of infrastructure projects.

Tennessee bonds sold

Down South, the Tennessee State School Bond Authority priced $212.44 million in series 2010 qualified school construction bonds on Wednesday, said a pricing sheet.

The bonds are due Sept. 15, 2027 and have a 4.848% coupon priced at par.

Barclays Capital Inc. and Citigroup Global Markets Inc. were the lead managers.

Proceeds will be used to construct and renovate schools throughout the state.

The Nashville-based authority finances new school construction and school renovations.

Ohio sets sale

On the horizon, the State of Ohio is gearing up to bring to market $581.69 million in series 2010 G.O. refunding bonds (Aa1/AA+/AA+), said a preliminary official statement.

The offering includes $26.63 million in series 2010A conservation projects G.O. refunding bonds, $178.035 million in series 2010C higher education G.O. refunding bonds, $330.32 million in series 2010C common schools G.O. refunding bonds and $46.705 million in series 2010D infrastructure improvement G.O. refunding bonds.

The 2010A bonds are due 2014 to 2019. The 2010C higher education bonds and 2010C common schools bonds are due 2015 to 2022. The 2010D bonds are due 2013 to 2022.

JPMorgan and KeyBanc Capital Markets Inc. are the co-lead managers.

Proceeds will be used to refund existing debt originally issued to finance various capital improvement projects.

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