New York is selling $ 745 million in Build America Bonds

New York, the largest city in the U.S., is selling $ 745 million in Build America Bonds, helping to boost the level of passive-municipal offerings scheduled to nearly double last week, the biggest gain in four months .

States and local governments established in the market about $ 6.1 billion in debt liabilities over the next 30 days, an increase of about 96 percent of 10 December, the biggest daily rise since 16 August. About $ 4.1 billion in building America are planned this week, or 34 percent of the $ 11.4 billion in total issuance.

Build America program, which expires on December 31 was excluded from the offer tax reached last week between President Barack Obama and Republican leaders of Congress. The increased risk of the disappearance of the program will help prices up and yields down as the supply declines, said Jim Holihan, who helps oversee about $ 1 billion in municipal securities of New York Evercore Partners LLC.

"There is no shortage of supply of BAB at the time but people are beginning to anticipate the offer will disappear," said Holihan.

The last city to build Americas published in October, with 27 - year bond with a yield of 5.52 percent, or 180 basis points over Treasuries to 30 years. The securities traded yesterday at an average yield of 5.79 percent, expanding 137 basis points call. A basis point is 0.01 percentage point.

General Electric

That compares with a 28-year corporate bond from General Electric Co., which yielded 153 basis points above the U.S. federal debt yesterday. New York is rated Aa2 by Moody's Investors Service and AA by Standard & Poor's, both investment grade third highest, while GE is rated Aa2 by Moody's and a higher level of S & P to AA +.

The bond yields, including a federal subsidy of 35 percent in interest costs, rose to 6.37 percent from December 10 up to 11 months, as the lack of clarity on the future of investors led the program to sell the bonds. The premium investors demand above U.S. Treasuries to keep the debt rose to 199 basis points on December 7, the highest since Aug. 31 before narrowing to 194 basis points at the end of the week.

"They sold while everything was uncertain," said Holihan. "It is fitting that have tightened a bit since then."

The spread of so-called probably will close in the first quarter of 2011 with known and most frequent issuers overcome, such as Americas to build a good investment opportunity, Citigroup Inc. analysts led by municipal strategist George Friedlander said in December 1910. research note.

"Value Exchanges"

"In the long term, we believe that a Build America Bonds current pockets of some value for investors in passive fixed income," said Citigroup. "Both large and small issues is likely to tighten in the first quarter of 2011, but due to lower liquidity premium, the biggest names tend to outperform."

New York, has sold about 2.17 billion U.S. dollars of the Americas Building from the beginning of the program. The city was the third largest issuer of municipal debt in 2009, after California and New York, according to Thomson Reuters.

"We're in the market about every month or two," said Alan Anders, deputy director of finance at the City Office of Management and Budget.

City Americas generation of an offer of $ 1,180,000,000 including $ 130 million in taxable conventional competitive they are selling today, and $ 300 million in tax exempt.

No change

Delivery prices of the city has accelerated despite the marketing strategy has not changed since the failure of Build America program, Scott Sieber, a spokesman for the Comptroller John Liu, said in an e-mail. JPMorgan Chase & Co., which is the signing of supply, market supply from domestic and international buyers, he said.

"Although not try to time the market, we will take advantage of current market conditions and expect a successful sale this week," said Sieber.

Justin Perras, a spokesman for JP Morgan, which is marketing the city's debt, did not return a phone call seeking comment.

U.S. Senator Ron Wyden, an Oregon Democrat, who previously led a failed attempt to include an extension to build the United States in the tax bill, introduced yesterday an amendment seeking to renew the program.

Here are pending sales of U.S. debt City:

Massachusetts, which has the third highest personal income per capita among U.S. states, plans to sell about $ 576 million in liabilities and Build America Bonds Recovery Area Economic Development through its future Commonwealth Fund Transportation to finance the repair of bridges throughout the state. The bonds, which are secured by pledged revenues, including gasoline taxes and registration fees of motor vehicles, carry the highest rating of Moody's and S & P. Banks led by JPMorgan stock market. (Updated December 14)

AMERICAN MUNICIPAL Power Inc., a provider of Columbus, Ohio-based public power systems, is selling $ 1.4 billion in debt liabilities backed by the revenues of today, including 1.14 billion U.S. dollars in Build America Bonds . The issue will finance the construction of three hydropower plants, according to a report by Fitch Ratings, the debt ratings of A, sixth highest. BMO Capital Markets is the underwriter. (Added 14 December)