Municipals continue to decline as mutual funds sell; Dasny brings $443.14 million SUNY bonds

By Sheri Kasprzak

New York, Aug. 22 - Municipals were weaker again on Thursday amid selling pressure and a lack of secondary activity, market sources reported.

Yields were up 3 basis points to 4 bps during the session. In comparison, the five-year Treasury note was up 4 bps at 1.69%, the 30-year bond yield was down 4.5 bps at 3.878%, and the 10-year note was barely moved, up half a basis point to close out the session at 2.902%.

Outflows from mutual funds have been the cause of some weakness throughout the week. Outflows were reportedly $2.1 billion in the week ended Aug. 14. On Tuesday, institutions sought to bid on $1.49 billion of bonds, the second-highest level of the year, and Wednesday's $953 million was above the $707 million average for 2013, according to the Investment Company Institute.

Dasny brings SUNY bonds

In Thursday's primary activity, the Dormitory Authority of the State of New York brought to market $443,135,000 of series 2013A revenue bonds for the State University of New York, said a pricing sheet. The deal was downsized from $526.68 million.

The bonds (Aa3/A+/A+) were sold through BofA Merrill Lynch and Siebert Brandford Shank & Co. LLC.

The bonds are due 2014 to 2033 with term bonds due in 2038 and 2043. The serial coupons range from 2% to 5.25%. The 2038 bonds have a 5% coupon and priced at 99.429, and the 2043 bonds have a 5% coupon and priced at 98.922.

Proceeds will be used to finance one year of the university's capital program to construct and renovate dormitory facilities.

Johnson & Wales bonds price

In other higher education bonds, the Colorado Educational and Cultural Facilities Authority priced $112,155,000 of series 2013 revenue bonds for Johnson & Wales University, said a pricing sheet.

The deal included $30.26 million of series 2013A bonds and $81,895,000 of series 2013B refunding bonds.

The 2013A bonds are due 2014 to 2033 with term bonds due in 2037 and 2043. The serial coupons range from 2% to 5% with 0.53% to 5.22% yields. The 2037 bonds have a 5.25% coupon and priced at 98.931 to yield 5.33%. The 2043 bonds have a 5.25% coupon and priced at 97.363 to yield 5.43%.

The 2013B bonds are due 2014 to 2033 with coupons from 3% to 5% with 0.53% to 5.22% yields.

The bonds (A2) were sold through Morgan Stanley & Co. LLC.

Proceeds will be used to finance capital expenditures for the university's Denver campus and to refund existing revenue bonds.

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