Munis weaken, again pressured by Treasuries; Allegheny County Sanitary brings $265.27 million

By Sheri Kasprzak

New York, July 29 – Top-rated municipals were once again pressured by weaker Treasuries, market insiders said.

The 30-year yield rose by 3 basis points to 3.25% on Wednesday, and the 10-year yield rose 3 bps to 2.28%.

Meanwhile, Treasuries were weakened by mixed home sales data and as the Federal Open Market Committee left the door open for a rate hike in September as it indicated moderate economic growth for the second half of the year.

The 10-year and 30-year benchmark Treasury note yields each rose 3 bps.

NYC prices for retail

The City of New York is on tap to price $750 million of series 2016 general obligation bonds (Aa2/AA/AA) in two tranches for institutional investors on Thursday.

Retail orders during Tuesday’s initial retail order period reportedly hit $180 million with the 19- and 20-year maturities oversubscribed.

The yield on the 4% 10-year bonds came in at 2.54%, and the 3.5% 20-year maturity had a 3.54% yield.

The offering includes $650 million of series 2016A bonds and $100 million of series 2016B bonds.

Siebert Brandford Shank & Co. LLC is the senior manager.

Proceeds will be used to redeem outstanding bonds.

Allegheny sewer bonds price

Heading up Wednesday’s active primary session, the Allegheny County Sanitary Authority of Pennsylvania offered $265.27 million of series 2015 sewer revenue bonds.

The bonds (A1) were sold through bookrunner Boenning & Scattergood Inc.

The bonds are due 2015 to 2031 with term bonds due in 2035, 2040 and 2045. The serial coupons range from 2% to 5% with yields from 0.29% to 3.55%. The 2035 bonds have a 5% coupon and priced at 112.174 to yield 3.57%. The 2040 bonds have a 5% coupon and priced at 110.725 to yield 3.73%, and the 2045 bonds have a 5% coupon and priced at 110.009 to yield 3.81%.

Proceeds will be used to refund a portion of the authority’s series 2005 revenue bonds and to pay a portion of its capital budget for the 2015-2016 fiscal year.

Cincinnati brings water bonds

Also in the utility sector, Cincinnati, Ohio, priced $211.79 million of series 2015 water system revenue bonds.

The deal included $47,115,000 of series 2015A revenue bonds, $76,085,000 of series 2015B refunding bonds and $88.59 million of series 2015C taxable bonds.

The 2015A bonds are due 2022 to 2037 with term bonds due in 2040 and 2045. The serial coupons range from 2.375% to 5%. The 2040 bonds have a 5% coupon and priced at 114.459. The 2045 bonds have a 4% coupon that priced at 98.269 and a 5% coupon that priced at 113.71.

The 2015B bonds are due 2022 to 2032 with coupons from 3.5% to 5%.

The 2015C bonds are due 2016 to 2022 with 0.75% to 2.768% coupons and all priced at par.

The bonds (Aaa/AAA/) were sold through Morgan Stanley & Co. LLC.

Proceeds will be used to finance capital improvements to the city’s water system, including the construction of new mains, as well as to refund the city’s series 2005B water system revenue bonds.

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