Municipals, Treasuries improve as GDP fails to meet expectations; Connecticut bonds ahead

By Sheri Kasprzak

New York, July 29 – Municipals rounded out the week on a positive note with yields falling as much as 3 basis points as Treasuries rallied on lackluster gross domestic product data, market insiders said.

The 10-year triple-A muni bond yield fell by 3 bps to 1.42%.

Meanwhile, Treasuries rallied after second-quarter GDP failed to meet expectations. The 10-year note yield fell by 6 bps to close at 1.46%, the 30-year bond yield fell by 5 bps to 2.18%, the five-year note yield ended the session 6 bps lower at 1.03%, and the two-year note yield fell 5 bps to 0.67%.

Moving to the week ahead, about $12 billion of new offerings are on tap, including a substantial deal from Connecticut.

The state is set to price $500 million of general obligation bonds on Wednesday.

The bonds will be sold competitively.

The offering includes $250 million of series 2016D bonds due 2017 to 2036 and $250 million of series 2016A taxable bonds due 2017 to 2026.

Proceeds will finance statewide capital projects.

Guam deal set

Also coming up in the week ahead, the government of Guam is on tap to price $245.45 million of limited obligation bonds (/BBB+).

The bonds will be sold through Citigroup Global Markets Inc. and Barclays and are due 2016 to 2036 with a term bond due in 2046.

Proceeds will be used for working capital needs, including the refinancing of a Bank of Guam loan, as well as to refund the government’s series 2009 bonds and 2013B certificates.

Wisconsin brings G.O. bonds

Heading up Friday’s light new-issue action, Wisconsin hit the market with $370.85 million of series 2016-2 general obligation refunding bonds.

The bonds (Aa2/AA/AA) were sold through RBC Capital Markets LLC.

The bonds are due 2021 to 2030 with 1.5% to 5% coupons and 0.97% to 2.07% yields.

Proceeds will be used to refund existing G.O. debt.

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