Muni yields drop yet again; Texas brings $7.8 billion 2% TRANs; Houston prices $229 million

By Sheri Kasprzak

New York, Aug. 24 - Municipal bond yields were lower yet again after stalling on Monday. One trader said Treasury yields also fell on Tuesday.

"Treasuries are lower again, and we feel that might be impacting munis too," he said.

"There's still a lot of interest in munis, especially on the short end where yields were just ridiculous. The rest of the market is doing well too, but short bonds seem to be the place to be."

Even so, visible supply after Tuesday's sale of $7.8 billion in tax and revenue anticipation notes from the State of Texas drops, said Alan Schankel, managing director with Janney Montgomery Scott LLC. The 30-day visible supply, according to Schankel, is light with only $7.5 billion in new deals expected.

The Texas TRANs (MIG 1/SP-1+/F1+) were sold competitively with a number of winners. The weighted net interest cost came in at 0.34069834359%.

Morgan Stanley & Co. Inc. won the largest portion of the notes, totaling roughly $3.3 billion. J.P. Morgan Securities Inc. won the next largest chunk - $1.6 billion. Wells Fargo Bank, NA, Goldman, Sachs & Co., Citigroup Global Markets Inc., Barclays Capital Inc., Hutchinson Shockey Erley & Co. and Jefferies & Co. also took portions of the notes.

The notes are due Aug. 31, 2011 and have a 2% coupon priced at 101.664.

Proceeds will be used to avoid a potential budget shortfall for the remainder of the fiscal year.

Houston bonds price

Also out of Texas, the City of Houston sold $229 million in series 2010C first-lien combined utility system revenue refunding bonds, said a pricing sheet.

The bonds (Aa2/AA/AA) were sold through RBC Capital Markets Corp.

The bonds are due 2011 to 2019 with 2% to 5% coupons. The full pricing details were not immediately available.

Proceeds will be used to refund and defease the city's outstanding series 1997E, 1999B-C and 2000A water and sewer system junior-lien revenue refunding bonds.

Lincoln brings deal

In other news, the Lincoln West Haymarket Joint Public Agency of Nebraska brought $100 million in series 2010A general obligation facilities Build America Bonds, said a pricing sheet.

The bonds (Aa1/AAA/) were sold competitively with Wells Fargo Bank winning the bid. The true interest cost came in at 3.204592%.

The bonds are due 2020 to 2030 with term bonds due 2035 and 2045. The serial coupons range from 3.5% to 4.45%. The 2035 bonds have a 4.75% coupon priced at 99.265. The 2045 bonds have a 5% coupon priced at 98.685.

Proceeds will be used to finance the construction, equipment, furnishing and financing of public facilities in the West Haymarket area of Lincoln, including a sports/entertainment arena; roads, streets and sidewalks; a pedestrian overpass; public plaza space; sanitary sewer mains; water mains; electric transmission lines; drainage systems; flood control; parking garages; and surface parking lots. The proceeds might also be used to acquire land, relocate existing businesses and undertake environmental remediation.

The agency finances capital projects for the West Haymarket section of Lincoln, Neb.

SCPPA sale ahead

Heading up Wednesday's sale calendar, the Southern California Public Power Authority plans to price $533.065 million in series 2010-1 Windy Points/Windy Flat revenue bonds (/AA-/AA-) through J.P. Morgan Securities Inc.

The bonds are due 2011 to 2030.

Proceeds will be used to prepay for 11.1 million megawatt hours of wind power generation over a 20-year contract.

The authority is based in Pasadena, Calif.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.