Municipals slide along with Treasuries amid light primary action; Grant County PUD prices debt

By Sheri Kasprzak

New York, Sept. 5 - Municipals ended the day somewhat off, but their losses were more subdued than those of Treasuries, market sources said.

"We are following [Treasuries], but we are still outperforming," a trader said in the afternoon.

Muni yields were reportedly off by 3 basis points to 5 bps. In comparison, the 10-year Treasury yield jumped 9.5 bps, and the 30-year Treasury bond was up 8.5 bps on the day. The 10-year Treasury yield hit 3%.

Primary activity was light on Thursday. Most of the week's primary deals priced Wednesday.

Grant County PUD bonds price

Amid the light primary action, the Grant County Public Utility District No. 2 of Washington state hit the market with $67,775,000 of series 2013J electric system revenue refunding bonds.

The bonds (Aa3/AA/AA) were sold through J.P. Morgan Securities LLC and Citigroup Global Markets Inc.

The bonds are due 2024 to 2033 with term bonds due in 2038 and 2041. The serial bonds have 5% coupons. The 2038 bonds have a 5% coupon and priced at 99.158, and the 2041 bonds have a 5% coupon and priced at 98.238.

One market source said during the session that yields were bumped for portions of the offering.

Proceeds will be used to refund a portion of the district's series 2011 electric system revenue bonds.

Investment-grade munis down

During the month of August, U.S. municipal bonds continued to slip, as has been the case all summer, said J.R. Rieger, vice president of fixed-income indexes with S&P Dow Jones Indices.

"U.S. municipal bonds have been leading the way down this summer, and August was no exception," Rieger wrote Thursday.

"Investment-grade municipal bonds tracked in the S&P National AMT-Free Municipal Bond Index recorded a -1.71% return for August."

The S&P Municipal Bond index was down 9.92% for August and down 15.88% for the year to date.

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