Munis close slightly off; new issues are met with mixed reactions; New York's MTA brings debt

By Sheri Kasprzak

New York, May 30 - Municipal yields were seen only slightly cheaper on Thursday after struggling throughout the week, traders reported. Secondary activity took a more positive direction while new issues got a mixed reception, said a trader reached in the afternoon.

"On the primary side, it's kind of hit or miss," the trader said. "Some names are doing well; others are struggling."

After climbing 8 basis points to 2.07% on Wednesday, the 10-year MMD AAA yield was flat on Thursday. Most of the market weakness was seen in longer maturities, a trader noted.

New York's Metropolitan Transportation Authority was one of the deals that seemed to require some tweaking.

NYC MTA bonds price

The Metropolitan Transportation Authority's $500 million sale of series 2013C transportation revenue bonds topped the day's offerings in addition to being one of the week's largest offerings.

The bonds (A2/A/A) were sold through J.P. Morgan Securities LLC and Loop Capital Markets LLC.

The bonds are due 2013 to 2033 with term bonds due in 2038, 2042 and 2043. The serial coupons range from 2% to 5%. The 2038 bonds have a 5% coupon and priced at 108.124, and the 2042 bonds have a 5% coupon and priced at 107.361. The 2043 bonds have a 4% coupon and priced at 97.081.

During the retail order period, the 2043 bonds priced at 4% to yield 4.2%, said Alan Schankel, managing director with Janney Montgomery Scott LLC, on Thursday.

"Given Wednesday's steep market drop, repricing to higher yields seems likely today [Thursday]," he noted.

Proceeds will be used to finance transit and commuter projects.

Massachusetts sale set

Looking ahead, the Commonwealth of Massachusetts will offer retail investors a special early order period on its planned $1,115,260,000 sale of general obligation bonds, said a statement released Thursday by the Massachusetts State Treasurer's Office.

Retail investors will be able to purchase the bonds starting Friday and ending Monday.

"As part of the sale, Massachusetts will be offering its first-ever environmentally conscious 'green' bonds," spokeswoman Delia Rissmiller said.

Massachusetts residents' orders will be given first priority, said Rissmiller.

The offering will be conducted in three tranches: $640.26 million of series 2013B G.O. refunding bonds, $375 million of consolidated loan of 2013 series C G.O. bonds and $100 million of consolidated loan of 2013 series D green bonds.

The bonds (Aa1/AA+/AA+) will be sold on a negotiated basis with BofA Merrill Lynch as the lead manager.

The commonwealth plans to use the proceeds to finance capital projects as part of its five-year plan and to refund existing G.O. debt. The proceeds of the green bonds will be used to fund environment projects within the commonwealth.

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