Municipals close a touch weaker as deals hit market; Wake County brings $176.42 million G.O.s

By Sheri Kasprzak

New York, April 9 - Municipal yields were seen softer 10 years and out, traders reported, despite improved Treasuries.

"Maybe a basis point to 3 in spots, between 10 and 30 years," said one trader of the weakness.

"It's really hard to tell what's pushing us down. Treasuries were stronger, new issues seem to be pricing okay. It could be a supply issue. We could be seeing some pressure."

Looking to the bigger picture, municipals still face some headwinds, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC.

"We continue to advise investors to be aware of the specific credit conditions of their individual holdings, no matter what happens when new economic data is released," Kozlik wrote Tuesday.

"There are still headwinds some municipal issuers will need to grapple with. Higher home prices are a positive development, but investors still need to conscious of how their individual holdings might be affected by larger macro events that are mostly out of the control of many of the individual issuers.

"Overall, we still think investors should generally stick to higher quality general obligation and revenue issuers unless they have in-depth understanding of the individual credit," Kozlik continued.

Wake County brings G.O.s

Moving to the day's primary action, the Wake County, N.C., sold $176,415,000 of series 2013 general obligation school loan bonds, said a pricing sheet.

The offering included $51,165,000 of series 2013A G.O. school bonds and $125.25 million of series 2013B G.O. public improvement bonds.

The bonds (Aaa/AAA/AAA) were sold competitively. Citigroup Global Markets Inc. won the series 2013A bonds at a 2.32% true interest cost and J.P. Morgan Securities LLC took the series 2013B bonds at a 2.33% TIC. There were five bids for the 2013A bonds and six bids for the series 2013B bonds, said a statement from the county.

The 2013A bonds are due 2014 to 2032 with 2.25% to 5% coupons.

The 2013B bonds are due 2014 to 2032 with 3% to 5% coupons.

Proceeds will be used to finance the costs to acquire, construct, expand and renovate school facilities in the county.

Florida Hurricane deal set

In upcoming sales during the week, the Florida Hurricane Catastrophe Fund Finance Corp. is set to price $2 billion of series 2013A revenue bonds during the week of April 8, said a sales calendar.

The offering is one of $2 billion deals set to price this week, the other being a $2 billion G.O. deal from the State of California.

The hurricane bonds (Aa3/AA-/AA) will be sold through Barclays.

Proceeds will be used to increase the corporation's cash-on-hand ahead of the 2013 hurricane season.

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