Municipals firm following rallying Treasuries; Dasny brings to market $1.09 billion bond sale

By Sheri Kasprzak

New York, June 24 – Municipals closed mostly firmer on Tuesday, following but underperforming Treasuries, insiders said, as the market turned its attention to a heavy primary market.

Yields were seen 2 to 3 basis points lower across the yield curve, with the short to intermediate portion of the curve seen improving the most.

Meanwhile, escalating violence in Iraq shoved Treasury yields down. The 10-year note yields ended down by 4 basis points to close at 2.583% and the 30-year bond yield down by 4.5 bps at 3.4%. The five-year note yield fell by 3 bps at 1.674%.

Dasny brings debt

Leading the massive new-issue calendar on Tuesday, the Dormitory Authority of the State of New York hit the market with $1,093,610,000 of series 2014 state personal income tax revenue bonds. The offering is just one of three billion-dollar offerings expected in a week that will offer $9 billion in supply. June is expected to be one of the busiest months of the year so far, with more than $30 billion expected.

The bonds were sold competitively.

The deal included $366,705,000 of series 2014C Group A bonds, $322.64 million of series 2014C Group B bonds, $386,245,000 of series 2014C Group C bonds and $81,625,000 of series 2014D taxable bonds, said a pricing sheet.

The 2014C Group A bonds are due 2016 to 2022 with 4% to 5% coupons and 0.3% to 2.23% yields. The 2014C Group B bonds are due 2025 to 2034 with 5% coupons and yields from 2.7% to 3.48%. The 2014C Group C bonds are due 2035 to 2042 with a term bond due in 2044. The serial bonds have 5% coupons with yields from 3.5% to 3.69%. The 2044 bonds have a 5% coupon priced at 110.496 to yield 3.7%.

The 2014D bonds are due 2016 to 2024 with 0.66% to 3.08% coupons all priced at par.

Proceeds will be used to finance the costs of capital projects for educational facilities, a longitudinal data system, environmental facilities and grants for educational, health-care and economic development programs, as well as to refund some outstanding bonds issued under the Upstate Community College program.

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