Municipals close firmer as secondary flourishes; Greenwich, Conn., brings G.O. bonds, BANs

By Sheri Kasprzak

New York, Jan. 16 - Municipal yields got a boost on Thursday from a strong secondary market, insiders said.

Yields were better by 5 basis points to 7 bps as Treasuries improved and thanks to Consumer Price Index data.

Treasury prices closed the day higher. The 10-year Treasury note yield fell by 4.5 bps to end at 2.841%. The 30-year bond yield fell by 3 bps to 3.774%, and the five-year note yield fell 3 bps to 1.642%.

Greenwich fetches three ties

The bidding process on the Town of Greenwich, Conn.'s bond and note offering Thursday posed an interesting dilemma, said Peter Mynarski, the town's comptroller, in an interview. The town hit the market with $130 million of series 2014 general obligation bonds and G.O. bond anticipation notes.

Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC both bid 0.131588% for the $85 million G.O. BAN portion of the offering.

"We offered the opportunity to split the bid evenly," Mynarski said Thursday afternoon.

"Morgan Stanley declined, and we told them it would be picked out of a hat. We put both names in a hat. Morgan Stanley was the winner."

Mynarski said he had never had this experience before - and neither had the town's financial adviser or bond counsel.

Adding to the oddity, there were 12 bids for the notes - and six of those were ties.

"We had three sets of ties," Mynarski explained.

The sale of the G.O. bonds was a little more straightforward. Roosevelt & Cross Inc. won the bid for them at a 2.445924% true interest cost.

The town sold $45 million of G.O. bonds and $85 million of G.O. BANs.

The bonds are due 2015 to 2034 with 2% to 5% coupons.

The BANs are due Jan. 22, 2015, have a 1% coupon and priced at par to yield 0.13%.

Proceeds will be used to finance capital improvements approved by the town.

The town is "not required to sell competitively, but it is policy," Mynarski noted.

"They have done negotiated for a land acquisition, but it's town policy to sell competitively."

San Francisco prices

In other competitive offerings, the City and County of San Francisco came to market with $209,955,000 of Proposition A election of 2008 series 2014A G.O. bonds.

The bonds (Aa1/AA+/AA) were sold competitively. Citigroup Global Markets Inc. won the bid at a 3.35% TIC.

The bonds are due 2014 to 2033 with 1% to 5% coupons, said a pricing sheet.

Proceeds will be used to finance the building, rebuilding and improving of earthquake safety for the San Francisco General Hospital and Trauma Center.

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