Muni yields continue to climb; San Francisco Airport brings $514.14 million of refunding bonds

By Sheri Kasprzak

New York, July 1 - Municipals kicked off the Friday before the Independence Day holiday on another sour note. Yields were seen higher by 1 basis point to 3 bps, following in line with Treasury losses, said market insiders.

Although the session was short and little trading activity took place, Treasuries continued to slide. Ten-year munis were off by 3 bps with spotty weakness elsewhere, said one trader reached during the session.

The week ahead will not provide a lot in the way of new issues, but two significant deals are slated to hit the market.

The State of Wisconsin is set to price $800 million of series 2011 operating notes competitively on Wednesday.

The notes (MIG 1//F1+) are due June 15, 2012, and proceeds will be used to finance general cash flow requirements for the state.

The state last sold $800 million of operating notes in July 2010. Those notes, which were due June 15, 2011, were priced with a 2% coupon to yield 0.5%.

Also on Wednesday, the City of Dallas plans to come to market with $236.3 million of series 2011 waterworks and sewer system revenue refunding bonds (Aa1/AAA/) through J.P. Morgan Securities LLC and M.R. Beal & Co.

The bonds are due 2013 to 2040.

Proceeds will be used to refund $148 million of outstanding commercial paper notes and to refund other debt.

Mississippi State sets sale

Also coming up on Wednesday, Mississippi State University is slated to bring $55.365 million of series 2011 residence hall construction and refunding revenue bonds through Morgan Keegan & Co. Inc.

The bonds are due 2012 to 2026 with term bonds due in 2031, 2036 and 2041.

Proceeds will be used to construct improvements to the university's main campus in Starkville, Miss., including the construction of a new residence hall. The proceeds will also be used to refund the university's series 2001 revenue bonds sold through the Mississippi Educational Building Corp.

San Francisco flies deal

Elsewhere, the San Francisco Airport Commission priced $514.135 million of series 2011 airport revenue refunding bonds, said a pricing sheet.

The bonds (A1//A+) were sold through Barclays Capital Inc.

The offering included $163.72 million of series 2011C AMT refunding bonds, $287.83 million of series 2011D refunding bonds and $62.585 million of series 2011E taxable refunding bonds.

The 2011C bonds are due 2019 to 2025 with 5% coupons. The 2011D bonds are due 2022 to 2031 with 5% coupons. The 2011E bonds are due 2012 to 2020 with 0.7% to 4.48% coupons, all priced at par.

Proceeds will be used to refund some maturities of fixed-rate bonds.

Whitney Museum bonds planned

Looking ahead, the Trust for Cultural Resources of the City of New York announced plans Friday to price $125 million of series 2011 revenue bonds for the Whitney Museum of American Art, said a preliminary official statement.

The deal is being conducted to construct and equip a 220,000-square-foot building in Lower Manhattan to house the museum's main facility. The new museum will include exhibition space, a conservatory, an auditorium and education and studio spaces.

The bonds (/A/A) will be sold on a negotiated basis with Morgan Stanley & Co. Inc. as the senior manager.

The bonds are due 2017 to 2026 with a term bond due July 1, 2031.

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