Municipals cheapen again in sympathy with Treasuries; Albuquerque Bernalillo water bonds price

By Sheri Kasprzak

New York, Aug. 20 – Municipals cheapened again on Wednesday as the Treasuries market slid on the release of the Federal Open Market Committee’s June meeting minutes, market insiders said.

Yields were seen higher by 1 basis point to 3 bps with the short end of the curve experiencing the most weakness.

This followed very closely with the performance of Treasuries. The five-year Treasury note yield climbed by 5.5 bps to 1.633%, and the 10-year note yield climbed by 2 bps to 2.428%, but the 30-year bond yield fell by half a basis point to close at 3.218%.

In the FOMC minutes, the Fed noted a weaker gross domestic product for the first half of the year, but stronger economic data was also noted.

Municipals have been following Treasuries closely this week, said a trader, as supply declines and trading activity remains muted.

Albuquerque water bonds price

Moving to primary action, the Albuquerque Bernalillo County Water Utility Authority of New Mexico hit the market with $182,975,000 of series 2014 water and sewer system refunding revenue bonds.

The deal included $96,065,000 of series 2014A senior lien bonds (Aa2/AA+/AA) and $86.91 million of series 2014B subordinate lien bonds (Aa3/AA/AA), according to a pricing sheet.

The 2014A bonds are due 2016 to 2026 with 2% to 5% coupons.

The 2014B bonds are due 2015 to 2025 with coupons from 1% to 5%.

The bonds were sold through J.P. Morgan Securities LLC.

Proceeds will be used to advance refund the authority’s series 2005 New Mexico Public Project revolving fund loan agreement and its series 2006A revenue bonds.

D.C. sells bonds

In other pricing activity, the District of Columbia priced $155,665,000 of series 2014A income tax secured revenue refunding bonds.

The bonds (Aa1/AAA/AA+) were sold through senior managers Siebert Brandford Shank & Co. LLC and Rice Financial Products Co.

The bonds are due 2014 to 2025 with 1% to 5% coupons and 0.095% to 2.40% yields, said a pricing sheet.

Proceeds will be used to refund the city’s series 2003 and 2006 certificates of participation.

According to a sellside source, both the Albuquerque and D.C. deals saw downward yield adjustments before final pricing.

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