Municipals end softer following FOMC remarks; Ohio offers $1.73 billion turnpike revenue bonds

By Sheri Kasprzak

New York, July 31 - Municipal yields were a touch off on Wednesday after the Federal Open Market Committee's July meeting. The Fed hinted at measured steps toward reducing bond buying.

Treasuries, meanwhile, were seen better with the 10-year note seen down 3 basis points and the 30-year bond down 4 bps.

While yields were little changed, 10-year bonds ended out the session up about 3 bps at 2.7%.

Ohio offers $1.73 billion

The offering of the week hit the market Wednesday. The State of Ohio priced $1,731,405,000 of series 2013A turnpike revenue bonds, said a pricing sheet.

The deal included $73,495,000 of series 2013A senior lien revenue bonds (Aa3/AA-/AA), $709.27 million of series 2013A-1 infrastructure bonds (A1/A+/A+), $700.45 million of series 2013A-2 capital appreciation bonds (A1/A+/A+) and $248.19 million of series 2013A-3 junior lien convertible capital appreciation bonds (A1/A+/A+).

The 2013A bonds are due in 2048 and have a 5% coupon priced at 101.435 to yield 4.81%.

The 2013A-1 bonds are due 2019 to 2020 and 2023 to 2033 with term bonds due in 2039 and 2048. The serial coupons range from 5% to 5.25% with 2% to 4.71% yields. The 2039 bonds have a 5.25% coupon priced at 103.169 to yield 4.83%. The 2048 bonds have a 5% coupon priced at 99.187 to yield 5.05%.

The 2013A-2 bonds are due 2036 to 2043 with 0% coupons and yields from 6.09% to 6.71%.

The 2013A-3 bonds are due 2034 to 2036 with 0% coupons and 5.70% to 5.80% yields.

Citigroup Global Markets Inc. was the senior manager.

The deal "received strong reception at initial pricing, with final terms expected to lower yields by about 5 basis points in longer maturities," said Alan Schankel, managing director with Janney Montgomery Scott LLC.

Proceeds will be used to finance capital improvements to the turnpike system.

Bend-La Pine bonds price

Also during the week, the Administrative School District No. 1 of Bend-La Pine, Ore., came to market with $91,825,000 of series 2013B general obligation bonds, said a pricing sheet.

The bonds (Aa1) were sold competitively with BofA Merrill Lynch winning the bid at a 3.82% true interest cost, said Brad Henry, chief operating officer for the district.

The bonds are due 2018 to 2033 with 4% to 4.5% coupons and 1.47% to 4.40% yields.

"We are not required to use a competitive process but decided to do so based on the issue and the market," Henry said in an interview Wednesday.

Proceeds will be used to finance capital expenditures.

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