Municipals lightly traded, mostly unchanged; Washington state prepares $1.23 billion deal

By Sheri Kasprzak

New York, Jan. 22 - Municipal yields were mostly unchanged on Tuesday after the Martin Luther King, Jr. holiday as trading activity remained very light, said traders.

Wednesday will likely provide a clearer picture of the market tone, said one trader.

"None of the bigger deals are pricing today, so it's hard to get a gauge," he said.

"I'd call it unchanged. Once some of these big deals start pricing, it will be easier to tell."

Another trader said a lot hinges on a few $1 billion-plus deals, including offerings out of Ohio and Washington state.

"The numbers are big, but keep in mind that we're looking at several billion-dollar, billion-plus deals this week," he said. "It's kind of all hitting us at once."

The week's calendar will be the largest in a while, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC.

"The municipal primary market new issue calendar has grown to over $8.5 billion for the week, which would represent the strongest supply week since prior to the 2012 holiday season," said Kozlik, who put the number of billion-plus deals scheduled to price this week at potentially three.

Washington deal set

Among those offerings, the State of Washington plans to hit the market on Wednesday with $1,231,300,000 of series 2013 general obligation bonds (Aa1/AA+/AA+) in four tranches.

The offering includes $230.58 million of series 2013D various purpose G.O. bonds, $551.91 million of series R-2013C various purpose G.O. refunding bonds, $125.36 million of series R-2013D motor vehicle tax G.O. refunding bonds and $323.45 million of series 2013E motor vehicle fuel tax G.O. bonds.

The bonds will price competitively.

Proceeds will be used to fund various statewide capital projects, including transportation-related construction projects, as well as to refund existing debt for a present value savings, including the state's 1996 variable-rate demand G.O. bonds.

JobsOhio to price bonds

Also ahead during the week, the JobsOhio Beverage System plans to price $1,526,740,000 of series 2013 statewide senior-lien profits revenue bonds (Aa2/AA/).

The deal includes $423,055,000 of series 2013A tax-exempt bonds, which are due 2015 to 2023 with a term bond due in 2038, and $1,103,685,000 of series 2013B taxable bonds, which are due 2015 to 2023 with term bonds due in 2029 and 2035.

The bonds will be sold through joint bookrunners J.P. Morgan Securities LLC and Citigroup Global Markets Inc.

Proceeds from the offering will be used to grant the system exclusive rights to operate a liquor enterprise and provide additional working capital for the enterprise.

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