Municipals strengthen amid strong primary action, active secondary; Texas deals dominate sales

By Sheri Kasprzak

New York, Dec. 9 – Municipals rounded out another session on a positive note, as primary activity remained strong and secondary action picked up, traders said.

Yields were lower by 2 basis points to 3 bps across the curve, with 10- to 20-year bonds seeing the most improvement, a trader said during the afternoon.

Munis followed rallying Treasuries early on, but one trader said munis were poised to improve anyway given the response to new offerings.

Meanwhile, the 10-year Treasury note yield fell by 4 basis points at 2.22%, and the five-year note yield also fell 4 bps at 1.63%. The 30-year bond yield fell by 3 bps at 2.87%.

Dallas, Austin price debt

Heading up the new-issue action, the Lone Star State led action with deals from both Dallas and Austin.

The City of Dallas, Texas, priced $531.66 million of series 2014 general obligation refunding and improvement bonds, said a pricing sheet.

The bonds (Aa1/AA+/) were sold through senior manager Wells Fargo Securities LLC.

The bonds are due 2015 to 2034 with 4% to 5% coupons.

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.

Austin prices airport deal

The City of Austin, Texas, sold $244,495,000 of series 2014 airport system revenue bonds, said a pricing sheet. The deal was cut from $267 million.

The bonds (A1) were sold through senior manager Citigroup Global Markets Inc.

The bonds are due 2026 to 2034 with term bonds due in 2039 and 2044. The serial bonds have 5% coupons with 3.05% to 3.50% yields. The 2039 bonds have a 5% coupon priced at 111.266 to yield 3.63% and the 2044 bonds have a 5% coupon priced at 110.394 to yield 3.73%.

Proceeds will be used to expand a terminal, design a parking garage and make other capital improvements at the Austin-Bergstrom International Airport.

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