Municipal yields hold steady; Austin, Texas, prices $144.68 million of bonds and obligations

By Sheri Kasprzak

New York, Aug. 26 - Municipal yields were largely unchanged on Thursday, holding at the record lows hit on Wednesday, said a trader.

"There's really not a lot going on today, so there's not much to push the market one way or the other," he said.

"Trading is pretty light. There's not a lot of primary volume, so we're kind of flat."

Primary action was, indeed, fairly light, led by a $144.678 million sale of public improvement bonds and obligations from the City of Austin, Texas.

The sale included $79.528 million in series 2010A public improvement bonds, $26.4 million in series 2010B taxable bonds, $22.3 million in series 2010 certificates of obligation and $16.45 million in series 2010 public property finance contractual obligations, said a pricing sheet.

The 2010A bonds are due 2011 and 2013 to 2030 with coupons from 2% to 4%. The 2010B bonds are due 2011 and 2013 to 2030 with coupons from 3% to 4.65%. The COPs are due 2011 to 2030, but the full details were not immediately available. The contractual obligations are due 2011 to 2017 with coupons from 1% to 1.75%.

The bonds (Aaa/AAA/AAA) were sold competitively. First Southwest Co. won the series 2010A bonds with a 3.347% true interest cost. Morgan Keegan & Co. took the series 2010B bonds, and BOSC won the COPs with a 3.018% TIC. R.W. Baird & Co. won the contractual obligations with a 1.273% TIC.

"The contractual obligations are seven years, and the others are 20 years, so that's why it's [the TIC] lower," said Dennis Waley of financial adviser Public Financial Management Inc.

Proceeds from the sale will finance a variety of capital improvement projects.

Polk sells $50 million

Also in primary activity, Polk County, Fla., priced $50 million in series 2010B utility system revenue Build America Bonds, said a pricing sheet.

The bonds (Aa3/AAA/) were sold through Bank of America Merrill Lynch.

The bonds are due Oct. 1, 2040 and have a 5.935% coupon priced at par.

Proceeds will be used to acquire, construct, extend and improve the county's utility system.

The county seat is Bartow, Fla.

Harris flood bonds ahead

Looking out on the horizon, the Harris County Flood Control District of Texas plans to bring to market $205 million in series 2010A contract tax refunding bonds, said a preliminary official statement.

The bonds (/AAA/AAA) will be sold through Goldman, Sachs & Co. and Piper Jaffray & Co.

Proceeds will be used to refund and defease all of the district's outstanding commercial paper notes.

Based in Houston, the district provides assistance for flood-prone regions of the county.

Torrance hospital sale set

Also coming up, the City of Torrance in California is expected to price $135 million in series 2010A revenue bonds for the Torrance Memorial Medical Center, said a preliminary official statement.

The bonds (A2/A+/) will be sold on a negotiated basis with Citigroup Global Markets Inc. and J.P. Morgan Securities Inc. as the senior managers.

Proceeds will be used to finance and reimburse the medical center for some of its health-care facilities.

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