Municipals close out firmer despite sagging Treasuries market; Georgia Housing offers bonds

By Sheri Kasprzak

New York, Feb. 19 - Municipals were firmer on Wednesday despite losses in the Treasuries market, insiders reported.

High-grade names particularly outperformed Treasuries, a trader said, with yields better by 2 basis points to 4 bps across the curve. Long bonds saw the most improvement, the trader said.

"Secondary is definitely picking up this afternoon, and the overall tone is better," a trader said during the session.

Meanwhile, Treasuries drifted after the Federal Open Market Committee's Jan. 28-Jan. 29 meeting minutes were released. The minutes indicated the federal funds rate might be increased in the near future.

After the minutes came out, the five-year Treasury note yield rose by 3 bps to close at 1.511%. The 10-year note yield ended up 2 bps at 2.732%, and the 30-year bond yield climbed by 2 bps to 3.702%.

Georgia Housing bonds price

Leading Wednesday's primary action, the Georgia Housing and Finance Authority hit the market with $126,355,000 of series 2014A single family mortgage bonds. The deal was downsized from $156.11 million.

The bonds were sold through senior managers Citigroup Global Markets Inc. and BofA Merrill Lynch.

The deal included $50.17 million of series 2014A-1 non-AMT bonds, $33.64 million of series 2014A-2 AMT bonds, $1.88 million of series 2014A-3 non-AMT bonds and $40,665,000 of series 2014A-4 non-AMT bonds, said a pricing sheet.

The 2014A-1 bonds are due 2029, 2034, 2038 and 2044. The coupon is 3.90% for the 2029 bonds, 4.40% for the 2034 bonds, 4.55% for the 2038 bonds and 4.70% for the 2044 bonds, and they all priced at par.

The 2014A-2 bonds are due 2014 to 2023 with a term bond due in 2026. The serial coupons range from 0.20% to 3.75% and all priced at par. The 2026 bonds have a 4.00% coupon and priced at par.

The 2014A-3 bonds are due 2014 to 2017 with term bonds due in 2024 and 2028. The serial coupons range from 0.15% to 0.85% and all priced at par. The 2024 bonds have a 3.45% coupon, and the 2028 bonds have a 3.90% coupon, and both priced at par.

The 2014A-4 bonds are due 2017 to 2025 with coupons from 0.80% to 3.55% and all priced at par.

Proceeds will be used to refund existing debt and to make mortgage loans to qualified Georgia residents.

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