Municipals firm despite weaker Treasuries; Portland, Ore., sells $76.51 million water bonds

By Sheri Kasprzak

New York, July 25 - Yields in the municipal bond market were firmer on Wednesday, with intermediate to long bonds firming by 1 basis point to 2 bps even as Treasuries were softer, market insiders reported.

"The overall tone is firmer," said a trader.

"Trading isn't that active, but I think it's a combination of solid trades, good reception to new issues, and reduced supply."

With just over $5 billion in new issues predicted for the week, it's a substantial decrease from the $8 billion to $10 billion pace the market has recently seen.

Portland brings water bonds

In primary action, the City of Portland, Ore., priced $76.51 million of series 2012 water system revenue bonds, according to a pricing sheet.

The bonds (Aaa) were sold competitively with Bank of America Merrill Lynch winning the bid with a 2.9415251% true interest cost, said Jennifer Cooperman, the city's treasurer.

The bonds are due 2013 to 2035 with a term bond due in 2037. The serial coupons range from 3% to 5%. The 2037 bonds have a 3.25% coupon priced at 95.889.

"Portland's city council-approved debt policy addresses the method of sale question with a presumption of competitive sale," said Cooperman in an interview.

"As a matter of policy, the city uses competitive sales as we believe it leads to lower net interest cost. For our urban renewal bonds, however, which are small issues, we have used negotiated sales."

Proceeds will be used to finance capital improvements to the city's water system.

Fort Bend parkway bonds price

In other pricing news Wednesday, the Fort Bend Grand Parkway Toll Road Authority of Texas sold $155,085,000 of series 2012 limited contract tax and subordinate lien toll road revenue bonds, according to a pricing sheet.

The bonds (//AA+) were sold through Bank of America Merrill Lynch and Citigroup Global Markets Inc.

The bonds are due 2021 to 2032 with term bonds due in 2037, 2042 and 2046. The serial coupons range from 3% to 5%. The 2037 bonds have a 5% coupon priced at 115.476, and the 2042 bonds have a 5% coupon priced at 115.031. The 2046 bonds have a 4% coupon priced at 100.788.

"Certainly, it's an issuer that isn't in the market very often, but we also have a structure that's interesting because there really aren't any short bonds," said one market insider of the offering.

"It seems to be something geared toward the institutional side, which is interesting."

Proceeds will be used to finance the construction, design, acquisition and development of toll overpasses on the parkway and the reconstruction of the existing roadway from U.S. Highway 59 to and including the intersection at Farm to Market Road 1093, as well as to pay 36 months of capitalized interest.

© 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.