Municipals close day with spotty weakness; Salt River Project details $917.95 million offering

By Sheri Kasprzak

New York, May 14 – Municipals, which have been on a downward slide throughout the week, continued the trend on Thursday, closing flat to weaker in spots, traders reported.

The market ignored a firmer Treasuries market with triple-A rated munis closing flat to 2 basis points higher, said a trader in the afternoon.

Meanwhile, Treasuries reversed with the five-year and three-year note yields falling by 6 bps and the benchmark 10-year note yield falling by 4 bps.

Salt River details offering

The week’s largest offering came from the Salt River Project Agricultural Improvement and Power District of Arizona, which priced $917,945,000 of series 2015A electric system revenue bonds.

The bonds (Aa1/AA/) were sold through Goldman Sachs & Co.

The bonds are due 2015 to 2036 with term bonds due in 2041 and 2045, a pricing sheet said. The serial coupons range from 1% to 5%. The 2041 bonds have a 5% coupon and priced at 125.366, and the 2045 bonds have a 5% coupon and priced at 126.66.

Yields on the offering were adjusted both up and down compared to Tuesday’s retail order period. The yield on the 30-year maturity has a 5% coupon to yield 3.56% to the 10-year call, a market source said.

Proceeds will be used to refund the district’s series 2004A, 2005A and 2006A electric system revenue bonds.

Pennsylvania Turnpike prices

Elsewhere during the session, the Pennsylvania Turnpike Commission hit the market with $379.63 million of series 2015A-1 turnpike revenue bonds.

The bonds (A1/A+/A+) were sold through Loop Capital Markets LLC.

The bonds are due 2020 to 2033 with term bonds due in 2035, 2040 and 2045. The serial bonds have 5% coupons. The 2035 bonds have a 4% coupon and priced at 98.622, the 2040 bonds have a 5% coupon and priced at 108.691, and the 2045 bonds have a 5% coupon and priced at 108.09.

Proceeds will be used to finance capital projects in the commission’s 10-year plan and to refund existing floating-rate notes.

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