Municipals decline again with Treasuries; New York Environmental brings $213.15 million bonds

By Sheri Kasprzak

New York, June 3 - Municipals were somewhat weaker, particularly in long maturities, market sources reported, but they once again outperformed a struggling Treasuries market.

Yields were seen up by 3 basis points to 4 bps with the most weakness seen around 30 years.

Bids-wanted, said a trader in the afternoon, were up across the entire yield curve.

Meanwhile, the Treasuries market dropped yet again on international inflationary fears. The European Central Bank is set to meet and is expected to take measures to fight low inflation. The 10-year note yield rose by 6.5 bps to 2.597%, the 30-year bond yield rose by 6 bps to 3.438%, and the five-year note yield climbed by 4.5 bps to 1.642%.

New York Environment prices

Heading up the day's primary activity, the New York State Environmental Facilities Corp. came to market with $213.15 million of series 2014B state revolving funds revenue bonds.

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

The bonds are due 2014 to 2036 with term bonds due in 2039 and 2044, said a pricing sheet. The serial coupons range from 1% to 5%. The 2039 bonds have a 5% coupon and priced at 113.226, and the 2044 bonds have a 5% coupon and priced at 112.779.

Proceeds will be used to finance loans to local governments for clean and drinking water projects.

Investors interested

The offering did attract quite a bit of interest from the investment community, said a market insider Tuesday afternoon, being one of the larger offerings during the week in a market that has suffered from a dearth of deals.

"It's triple-A rated, it's a quality issuer, and I think a lot of investors have been seeking out this kind of bond for a while," the market source said.

"There's been very little to choose from."

The corporation last came to market with similar bonds in July 2013 when it sold $166,585,000 of revolving funds revenue bonds. Those bonds are due 2014 to 2031 with 2% to 5% coupons and yields from 0.18% to 4.125%.

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