Municipals firmer on primary, strong Treasuries; California G.O.s retail yields 1.48% to 4.92%

By Sheri Kasprzak

New York, Oct. 22 - Municipals were firmer on Tuesday after Treasuries improved on a long-delayed nonfarm payrolls report for September and new issues took center stage, market insiders reported.

Municipal yields were seen lower by 3 basis points to 5 bps. In comparison, the 10-year Treasury note yield fell by 9 bps to close out the day at 2.516%, and the five-year note yield fell by 7 bps to 1.285%. The 30-year bond yield fell by 6 bps to end the session at 3.611%.

California prices for retail

During the session, the State of California released the results of its retail order period for its series 2013 various purpose general obligation bonds. The state was slated to finalize pricing on the bonds Tuesday, but the full details were unavailable by press time.

Retail investors ordered $563.07 million of the $1.28 billion of tax-exempt bonds offered to them, said Bill Ainsworth, spokesman for the California State Treasurer's Office.

The five-year tax-exempt bonds initially yield 1.48%, and the 10-year bonds yield 3.15%. The 30-year maturity had a 4.92% initial yield, said Ainsworth.

The $2,189,880,000 offering includes $707,705,000 of series 2013 various purpose G.O. bonds, $246.01 million of series 2013 school facilities G.O. bonds, $600 million of series 2013 various purpose G.O. refunding bonds, $450 million of series 2013 mandatory put G.O. bonds and $186,165,000 of series 2013 taxable various purpose G.O. bonds.

Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are the senior managers for the bonds (A1/A/A/).

Proceeds will finance capital projects, including the construction of schools within the state.

Pennsylvania G.O. bonds price

Another major state offering came from the Commonwealth of Pennsylvania, which sold $749.9 million of second series of 2013 G.O. bonds.

The bonds (//AA) were sold competitively. The issuer did not immediately return calls for the winning bidder Tuesday.

The bonds are due 2014 to 2033 with 3% to 5% coupons and 0.17% to 4.40% yields, said a pricing sheet.

Proceeds will be used to finance the construction, reconstruction and rehabilitation of capital facilities within the commonwealth.

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