Municipal yields fall along with Treasuries; about $10 billion of new supply on tap this week

By Sheri Kasprzak

New York, Dec. 8 – Municipals were stronger in secondary trading on Monday ahead of about $10 billion of new offerings, traders said.

Yields were seen about 3 basis points to 5 bps lower following a rallying Treasuries market, said a trader in the afternoon.

Meanwhile, the 30-year bond yield fell by 7 bps, pushed by Friday’s nonfarm payrolls numbers, which fueled speculation about an interest rates hike early next year.

For the week ahead, about $10 billion of new deals are set to hit the market, down somewhat from the $16 billion that came to market last week but still well above the recent average.

Harris-Houston deal set

Heading up the week’s new issues is an offering from the Harris County-Houston Sports Authority. The authority had planned to price its $568,910,293 offering of series 2014 revenue refunding bonds last week, but the deal was postponed.

The offering includes $458,435,293 of series 2014A senior-lien bonds (A2/A-/), which are due 2016 to 2034 with term bonds due in 2039 and 2053; $33.19 million of series 2014B taxable senior-lien bonds (A2/A-/), which are due 2015 to 2016; and $77,285,000 of series 2014C second-lien bonds (A3/BBB/), which are due 2015 to 2034.

The bonds will be sold through senior manager Morgan Stanley & Co. LLC.

Proceeds will be used to refund and restructure a significant portion of the authority’s senior- and junior-lien bonds.

Dallas arranges new offering

In other offerings, the City of Dallas is expected to price $529,905,000 of series 2014 G.O. refunding and improvement bonds (Aa1/AA+/) on Tuesday.

The bonds will be sold through Wells Fargo Securities LLC and are due 2015 to 2034.

Proceeds will be used to finance capital improvements, including street and transportation improvements, flood protection and storm drainage facilities, library facilities and city hall improvements, as well as to refund commercial paper notes and the city’s series 2005 G.O. refunding bonds, series 2007A G.O. refunding and improvement bonds and series 2008 G.O. bonds.

Baton Rouge sewer bonds eyed

Also coming up on Tuesday, the East Baton Rouge Sewerage Commission, La., is set to price $341.35 million of series 2014 revenue refunding bonds (Aa3/AA-/AA-) through J.P. Morgan Securities LLC and Citigroup Global Markets Inc.

The offering includes $133.77 million of series 2014A taxable bonds, which are due 2019 to 2031, and $207.58 million of series 2014B tax-exempt bonds, which are due 2020 to 2039.

Proceeds will be used to refund the commission’s series 2006A-B and 2009A revenue bonds.

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