Muni yields remain firm ahead of $6.5 billion of new issues; MTA to sell $500 million of bonds

By Sheri Kasprzak

New York, Jan. 14 - Municipal yields were firmer again on Monday, skating along on the improvements seen Friday, traders said.

Yields were firmer by 1 basis point to 3 bps across the entire yield curve, said a trader reached in the afternoon.

"The tone is definitely firmer, and it's been pretty active for a Monday," the trader said.

"Not only is secondary seeing some good activity, and we're seeing some major triple-A names performing really well, but retail is picking up new issues at really good levels. I think it's going to be a good week. Supply seems to be picking up."

In fact, new issue supply is expected to be around $6.5 billion for the week, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC.

Meanwhile, municipal mutual fund flows have turned positive after two weeks of negative results, Kozlik said.

"There were about $291 million of municipal flows for the week ending Jan. 2, as reported by ICI data," he said. "There were almost $4 billion of negative flows during a two-week period in the middle of December, ending Dec. 26, after 17 straight weeks of positive flows. This indicator is a key meter of retail investors' demand for municipal bonds."

MTA bonds ahead

One of the week's major offerings will come from the Metropolitan Transportation Authority of New York, said Kozlik.

The authority intends to price $500 million of series 2013A transportation revenue bonds (A2).

The senior managers are Citigroup Global Markets Inc. and M.R. Beal & Co.

The authority intends to use the proceeds from the deal to finance transit and commuter projects.

In other upcoming deals for the week, Ohio State University plans to price $350 million of series 2013A special purpose general receipts bonds.

The bonds (Aa2/AA-/) will be sold through Barclays and RBC Capital Markets LLC.

The bonds are due 2023 to 2033 with term bonds due in 2038 and 2043.

Proceeds from the offering will be used to construct, acquire and equip student housing, dining and recreational facilities at the university's Columbus campus.

Louisiana stadium deal set

Also coming up, the Louisiana Stadium and Exposition District is expected to price $343.29 million of series 2013 senior revenue refunding bonds in two tranches.

The deal includes $297.09 million of series 2013A tax-exempt bonds and $46.2 million of series 2013B taxable bonds.

The bonds (A3//A) will be sold through Bank of America Merrill Lynch.

Proceeds will refund existing debt.

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