Municipals little changed as week starts; New Jersey pushes back $350 million G.O. offering

By Sheri Kasprzak

New York, April 22 - Municipal yields were little changed to kick off the week, traders reported.

"I'd call it flat today," a trader said late in the day.

"There's not a lot of activity. It looks like things are slowing down somewhat this week."

In fact, new issues will total a bit less than $8 billion. New Jersey's $350 million sale of general obligation bonds is no longer on the calendar. The deal has been postponed to May 1, market sources said, mostly due to an already-crowded calendar.

In the broader market, demand could be easing, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC.

"The demand side is still showing some signs of weakening, which is expected during tax time," Kozlik said Monday.

"For the week ending April 10, ICI reported $857 million of outflows from municipal market mutual funds, the largest amount of outflows since the end of 2012's run-up to the fiscal cliff."

Last week, benchmark yields fell slightly for municipals and were unchanged to slightly better for Treasuries, Kozlik said.

"The 10-year AAA MMD fell 2 bps and ended the week at 1.7%, while the 30-year ended the week at 2.9%," he said.

New Jersey postpones

Although New Jersey had been expected to price $350 million of series 2013 various purpose G.O. bonds on Tuesday, the deal has been pushed back to May 1, market insiders said, due mostly to a calendar filled with fairly large deals.

"I think it's due to the sense that there's been a lot of big deals pricing recently, and they wanted to wait for things to settle down," a market source said.

The offering will be conducted competitively. The bonds are due 2014 to 2033, and proceeds from the sale will be used to finance capital projects.

Wisconsin preps G.O. bonds

In one of the largest sales of the week, the State of Wisconsin will come to market competitively on Tuesday with $434,525,000 of series 2013A G.O. bonds.

The bonds are due 2014 to 2033, and proceeds from the offering will be used to acquire, construct, develop, extend, enlarge and improve land, water, property, highways, buildings, equipment or facilities for public purposes.

Also coming up on Tuesday, the California Public Works Board plans to sell $400 million of series 2013 lease revenue bonds (A2/A-/BBB+).

Wells Fargo Securities LLC is the senior manager for the offering.

The deal includes $60 million of series 2013D Yuba City Courthouse lease revenue bonds and $340 million of series 2013E Coalinga State Hospital lease revenue refunding bonds.

Proceeds will finance courthouse improvements and refund existing debt.

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