Municipals close unchanged to softer in longer maturities; Knoxville brings $122.63 million

By Sheri Kasprzak

New York, Feb. 12 - Municipal yields were unchanged inside of 15 years, traders reported, with some weakness seen beyond 15 years.

With quite a few new issues pricing Tuesday, the market did have some direction, said a trader, but outside of 15 years, yields were a touch cheaper.

The largest deal of the week hit the market Tuesday. The San Francisco Public Utilities Commission sold $331,585,000 of series 2013B wastewater revenue bonds, said a pricing sheet.

The bonds (Aa3/AA-/) were sold competitively. The issuer did not immediately return calls for the winning bidder Tuesday.

The bonds are due 2023 to 2036 with term bonds due in 2039 and 2042. The serial coupons range from 4% to 5%. The 2039 bonds have a 4% coupon and priced at 104.042, and the 2042 bonds have a 4% coupon and priced at 103.218.

Proceeds will be used to finance capital projects and retire commercial paper notes.

The issue "represents initial funding for the sewer system's $5.3 billion, 10-year capital improvement plan, which serves San Francisco as well as three San Mateo County communities," Alan Schankel, managing director with Janney Montgomery Scott LLC, said on Tuesday.

Knoxville sells utility bonds

In other primary action Tuesday, the City of Knoxville, Tenn., sold $122,625,000 of series 2013 wastewater and water revenue refunding bonds, said a pricing sheet.

The deal included $9,285,000 of series 2013Y water system bonds and $113.34 million of series 2013A wastewater bonds.

The 2013Y bonds are due 2014 to 2030 with 3% to 4% coupons.

The 2013A bonds are due 2014 to 2037 with 2% to 4% coupons.

The bonds (Aa2/AA+/) were sold competitively. BofA Merrill Lynch won the water bonds, and Citigroup Global Markets Inc. won the wastewater bonds, said Mark Walker, the city's chief financial officer.

Proceeds will be used to refund the city's outstanding utility revenue bonds.

Walker said that it is the city's policy to sell its debt competitively.

More Knoxville bonds ahead

Coming up on Wednesday, Knoxville will sell another $22.5 million of utilities bonds competitively, said Walker.

That offering includes $10.25 million of series 2013CC electric system revenue refunding bonds, which are due 2013 to 2031, and $12.25 million of series 2013S gas system revenue refunding bonds, which are due 2014 to 2031.

© 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.