Tone turns a touch softer; about $8 billion of new deals ahead as volume starts to slow

By Sheri Kasprzak

New York, Dec. 3 - Municipal yields were a touch softer on Monday as retail order periods were conducted for two of the larger offerings of the week, market sources reported.

"There's some weakness out there in spots," said one trader.

"Trading is spotty. It's coming in waves. Early on, it was somewhat stronger, but it seems to be tapering off. Overall, the feeling is sluggish," the trader added.

Meanwhile, the retail order periods were conducted for deals from the New York Municipal Water Finance Authority and the Texas Transportation Commission, said a trader.

Week ahead offers $8 billion

Moving to the week ahead, new-issue activity will continue to be robust, with about $8 billion of new issues ahead, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC.

"This week and the week of Dec. 10 are really the last two weeks investors should expect to see sizable primary market municipal volume, and while the week of the 17th will include some bond sales, volumes are typically lighter," said Kozlik Monday.

Making up a large chunk of that volume is a $1,246,995,000 offering of series 2012 transportation system bonds from the New Jersey Transportation Trust Fund Authority. On Tuesday, the authority is scheduled to price the bonds through Barclays in two tranches.

The deal includes $326,255,000 of series 2012A transportation system bonds and $920.74 million of series 2012B transportation programs bonds.

The bonds (A1/A+/A+) will be used to fund fiscal 2013 transportation projects.

Texas Transportation on tap

The week's action will be led by a $939.27 million offering of series 2012 highway improvement general obligation bonds from the Texas Transportation Commission.

The offering includes $839.27 million of series 2012A tax-exempt G.O. bonds, which are due 2019 to 2042, and $100 million of series 2012B taxable G.O.s, which are due 2014 to 2019.

The bonds (Aaa/AA+/AAA) will be sold through Wells Fargo Securities LLC and Bank of America Merrill Lynch.

Proceeds will be used to finance or reimburse the commission for the costs of highway improvements.

New York Municipal Water eyed

Also coming up during the week, the New York Municipal Water Finance Authority is scheduled to come to market with $435 million of series 2013BB water and sewer system second general resolution revenue bonds through Raymond James/Morgan Keegan.

Proceeds from the offering will be used to refund existing commercial paper notes and to make a deposit to a construction fund.

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