Municipals firm along with Treasuries; Utah brings $226.18 million of G.O. bonds competitively

By Sheri Kasprzak

New York, July 11 - Municipals firmed on Thursday after several troubled sessions as Treasuries improved and new issues hit their stride, market sources said.

"We're seeing new deals pricing much, much better than benchmark, so that's giving us some relief," one market source said.

"Treasuries are also better. The tone is overall improved for us."

Despite the recent market weakness - 10-year bonds were up 5 basis points Wednesday - outflows from municipal mutual funds has slowed, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

"Compared to outflows of $7.7 billion two weeks ago, municipal mutual funds lost only $920 million last week, according to data from the Investment Company Institute," Schankel said Thursday.

Utah offers G.O. debt

Heading up the session's competitive offerings, the State of Utah brought $226,175,000 of series 2013 general obligation bonds to market on Thursday.

The bonds (Aaa/AAA/AAA) were sold competitively. Morgan Stanley & Co. LLC won the bid at a 2.871154% true interest cost, said a market source connected to the deal.

The bonds are due 2014 to 2028 with 3% to 5% coupons and 0.17% to 3.57% yields.

The five-year bonds were seen 9 bps through the MMA 5% triple-A benchmark, and the 10-year bonds were 25 bps richer than the MMA 5% benchmark, a market source said.

Proceeds will be used to finance highway projects throughout the state.

Dallas-Fort Worth bonds price

Also amid the day's action, the Dallas-Fort Worth International Airport reportedly priced its $409.63 million of series 2013D non-AMT joint revenue refunding bonds through the Cities of Dallas and Fort Worth.

The bonds are due 2014 to 2033 with coupons reportedly coming in between 2% and 5.25%. The full pricing terms were not immediately available Thursday afternoon.

The bonds were reportedly repriced to lower yields with short bonds dropping by 15 bps upon repricing.

The bonds (A2/A+/A) were sold through Loop Capital Markets LLC and BofA Merrill Lynch.

Proceeds will be used to refund the airport's series 2003A revenue bonds.

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