Municipals close out week mostly flat; Texas Transportation Commission, Connecticut deals set

By Sheri Kasprzak

New York, Sept. 26 – Municipals were generally unchanged on the week, traders reported.

In a slower session for primary and secondary, yields were mostly in a holding pattern, said a trader in the afternoon. Around five years, however, yields were higher by about a basis point.

Meanwhile, primary action in the week ahead will be a bit light with $5 billion of new deals expected. This follows about $8.5 billion of supply during the week just ended.

Texas Transportation ahead

Leading the week’s new issues is a $1.1 billion offering from the Texas Transportation Commission.

The bonds (Aaa/AAA/AAA) will be offered through J.P. Morgan Securities LLC.

The Texas highway improvement general obligation bonds will be used to finance or reimburse the Texas Highway Fund for highway capital improvement projects.

Connecticut deal planned

In another transportation offering, Connecticut is set to price $730 million of series 2014 transportation infrastructure special tax obligation bonds on Tuesday.

Raymond James/Morgan Keegan is the lead manager with BofA Merrill Lynch, Citigroup Global Markets Inc., Goldman Sachs & Co., RBC Capital Markets LLC and Siebert Brandford Shank & Co. LLC as the co-senior managers.

The offering includes $600 million of series 2014A bonds and $130 million of series 2014B refunding bonds.

Proceeds will be used to finance the construction, reconstruction, improvement and repair of state highways and other transportation projects and to refund existing transportation bonds.

California redevelopment agencies could come back

California’s redevelopment agencies could make a comeback if legislation is adopted to expand local governments’ options for funding infrastructure projects.

The law would give local governments the ability to issue tax increment debt, an option eliminated by the dissolution of redevelopment agencies in 2012.

“California had over 40 redevelopment agencies prior to their dissolution in 2012 that received more than $5 billion of property tax annually and issued tens of billions of dollars in debt,” wrote Fitch Ratings director Stephen Walsh and senior director Rob Rowan in a report released Friday.

“Those redevelopment agencies addressed a broad range of urban improvements and were funded by local property taxes whether or not the district’s or town’s voters had approved them.”

Under this new legislation, redevelopment activities are limited to infrastructure improvements.

On tap during the week ahead is an offering from a redevelopment successor agency. The Riverside Redevelopment Successor Agency is slated to price $65.17 million of series 2014 tax allocation refunding bonds (/AA-/) on Monday.

Stifel, Nicolaus & Co. is the senior manager.

Proceeds will be used to refund existing TABs.

LSU yields fall

Moving to secondary action, the Louisiana State University and Agricultural and Mechanical College’s $81.88 million of series 2014 auxiliary revenue refunding bonds were seen trading actively Friday.

The 3.5% 2032s were seen trading between 3.474% and 3.649% during the session and ended the day at 3.527%. The bonds priced Wednesday at a 3.68% yield.

The bonds (A1//AA-) were priced through Raymond James/Morgan Keegan.

The bonds are due 2015 to 2034 with a term bond due in 2036. The serial coupons range from 3% to 5%. The 2036 bonds have a 3.75% coupon and priced at 98.388.

Proceeds will be used to refund the university’s series 2006 auxiliary revenue bonds.

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