Munis firm as Treasuries rally, supply pressure evaporates; Triborough brings $231.49 million

By Sheri Kasprzak

New York, May 30 - Municipals rounded out the session on a firmer note as Treasuries rallied and fewer new offerings alleviated some supply pressure that kept yields slightly softer last week, said market insiders.

Muni yields were firmer, though they still underperformed Treasuries, said one trader reached during the session.

"We're following Treasuries, but we're underperforming [them]," he said.

Yields were seen firmer by 3 to 6 basis points, said one trader reached during the afternoon.

Supply was another major factor in the tone of the market. Fewer offerings and continued demand helped the market substantially, said a trader.

"The drop in supply is a significant factor this week," the trader said.

Triborough offering prices

In Wednesday's pricing action, the Triborough Bridge and Tunnel Authority of New York led activity with $231.49 million of series 2012A general revenue bonds, said a pricing sheet.

The bonds (Aa3/AA-/) were sold competitively. Citigroup Global Markets Inc. won the bid with a 3.6057% true interest cost, said Aaron Donovan, media liaison with the Metropolitan Transportation Authority.

The bonds are due 2012 to 2037 with a term bond due in 2042. The serial coupons have 2% to 5% coupons. The 2042 bonds have a 4% coupon and priced at par.

"The decision to use a competitive method of sale was based on two key factors: [the] size of the issue at $250 million was not too big and therefore didn't need significant pre-marketing, and TBTA is the MTA's best-rated credit with the longest history. This makes it easier for a competitive bid," Donovan said.

Proceeds will be used to refund the authority's series 2005B-4 revenue bonds.

Commonwealth Transportation set

Headlining Thursday's pricing action is the largest offering of the week. The Commonwealth Transportation Board of Virginia will come to market with $600 million of series 2012 transportation capital projects revenue bonds - the board's second offering of the month.

This time, the board will sell its bonds, which are due 2013 to 2037, competitively.

Proceeds will finance transportation capital projects.

The board sold $50.62 million of series 2012 Route 28 transportation revenue refunding bonds on May 9. The bonds were also sold competitively. The bonds are due 2013 to 2018 and 2028 to 2032 with 2% to 5% coupons.

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