Municipal yields climb again following sell-off; Seattle brings to market $96.91 million bonds

By Sheri Kasprzak

New York, June 4 - Municipal prices slid on Wednesday after a sell-off sparked by a sudden surge in volume, said a trader during the session.

"There's a sell-off underway because of the new issues that are flooding in," the trader said.

"Yields are up by about a basis point [across the curve]."

Volume has increased substantially, said a market insider, to about $6.5 billion this week from less than $4 billion last week.

Munis weren't helped at all by Treasuries during the day. The latter slid following the release of the Federal Reserve's Beige Book, which indicated economic growth across all 12 districts. The 10-year Treasury note yield, which has struggled for the past five sessions, rose another 1.5 bps to close at 2.606%. The 30-year bond yield climbed by 1 bp to 3.444%, and the five-year note yield also rose by 1 bp to 1.646%.

Seattle brings bonds

Amid the new issues offered during the session, the City of Seattle priced $96.91 million of series 2014 solid waste revenue and refunding bonds.

The bonds (Aa3/AA/) were sold competitively with Citigroup Global Markets Inc. winning the bid at a 3.322027% true interest cost, said Michael van Dyck, debt manager for the city.

The bonds are due 2015 to 2039 with 2% to 5% coupons, said a pricing sheet.

"The City of Seattle has sufficiently high credit ratings and name recognition that it typically receives superior pricing in a competitive sale," van Dyck said Wednesday.

Proceeds will be used to finance various capital projects for the city's solid waste system.

Short-term deals abound

Elsewhere in the market, a surge in short-term debt has begun as issuers seek out both excellent interest rates and prepare for the coming fiscal year, said a market source asked about the trend.

"It's a great market to borrow, especially for short-term debt," he said.

Among Wednesday's short-term debt offerings, Fresno County, Calif., offered up $65 million of series 2014-2015 tax and revenue anticipation notes.

The notes (/SP-1+/) were sold competitively with Mitsubishi UFJ Securities Inc. as the winning bidder at a 0.1165% TIC.

The notes are due June 30, 2015, have a 1% coupon and priced at 100.876 to yield 0.12%, said a pricing sheet.

Proceeds will be used to finance capital expenditure needs in the coming fiscal year.

Long Beach prices

Also amid Wednesday's new issues, the City of Long Beach, Calif., hit the market with $325 million of series 2014C harbor revenue notes.

The notes (/AA/AA) were sold through Citigroup and Goldman Sachs & Co.

The notes are due Nov. 15, 2018 and have a 3% coupon that priced at 108.59 to yield 1.01%, a 4% coupon that priced at 112.906 to yield 1.01% and a 5% coupon that priced at 117.223 to yield 1.01%, said a pricing sheet.

Proceeds will be used to finance or refinance the costs of the reconstruction of the Gerald Desmond Bridge.

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