Municipals close flat to a touch off as new-issue slate climbs; Chicago, Illinois deals ahead

By Sheri Kasprzak

New York, Jan. 8 – Municipals rounded out a slower session Friday unchanged to slightly weaker, traders reported.

Yields on top-rated munis were flat to 1 basis point higher, said a trader in the late afternoon.

Meanwhile, new-issue supply is heating up, increasing to just under $10 billion on tap for the week ahead from only $2.75 billion offered during the week just ended. The 30-day visible supply climbed to a substantial $13.1 billion, its highest level since October.

Elsewhere, Lipper Inc. reported muni mutual fund inflows climbed to $993 million for the week ended Jan. 6.

Chicago, Illinois deals set

Two significant deals are set to price out of Illinois during the week.

The City of Chicago is ready to offer $500 million of general obligation refunding bonds via Citigroup Global Markets Inc.

That deal includes $498.14 million of tax-exempts and $1.86 million of taxables.

The Windy City plans to refund or pay interest on all or certain outstanding G.O. bonds.

Also ahead, the State of Illinois is scheduled to price $480 million of G.O. bonds on Thursday.

The bonds will be sold competitively and are due 2017 to 2041.

Proceeds will fund capital expenditures.

Marilyn Cohen, chief executive officer with Envision Capital Management, a California-based investment advisory firm, told Prospect News in a recent interview that she has frequently steered her Illinois-based clients away from offerings out of their home state, particularly bonds from the state and Chicago.

Trinity bonds ahead

Also during the week, the Trinity Health Credit Group is in the market with a $568.05 million composite issue on Tuesday.

The offering is comprised of $280,805,000 of bonds through the Michigan Finance Authority, $222.05 million of bonds through the Connecticut Health and Educational Facilities Authority, $22.32 million of bonds through the Idaho Health Facilities Authority and $42,875,000 of bonds through Montgomery County, Md.

The syndicate selling the bonds (Aa3/AA-/AA) is led by BofA Merrill Lynch and Goldman Sachs & Co.

Proceeds will equip, construct, improve and renovate Trinity Health facilities.

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