Municipals end flat to stronger; Pennsylvania brings $990.55 million G.O. bonds

By Sheri Kasprzak

New York, June 2 – Municipals rounded out Thursday flat to stronger with the 10-year yield remaining at 1.70% and the 30-year bond yield closing down 1 basis point to 2.63%, traders said.

Meanwhile, Treasuries were improved as jobless claims fell. The 30-year Treasury bond yield ended the session 5 bps lower at 2.58% and the 10-year note yield 4 bps lower at 1.81%. The five-year note yield fell by 3 bps to 1.36%, and the two-year note yield dropped 2 bps at 0.89%.

Pennsylvania sells G.O.s

Heading to new-issue action, the week’s largest offering came from the Commonwealth of Pennsylvania, which sold $990.55 million of first series 2016 general obligation bonds.

The deal included $355 million of G.O. bonds and $635.55 million of refunding bonds.

The G.O.s are due 2017 to 2036 with 3% to 5% coupons and yields from 0.68% to 3.229%.

The refunding bonds are due 2016 to 2027 with 5% coupons and yields from 0.7% to 2.5%.

The bonds (Aa3/AA-/AA-) were sold competitively.

Proceeds will be used to finance transportation projects and refund existing G.O.s.

Dasny brings NYU bonds

Elsewhere, the Dormitory Authority of the State of New York sold $831,375,000 of series 2016 revenue bonds for New York University.

The offering included $585,155,000 of series 2016A bonds and $246.22 million of series 2016B taxable bonds.

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

The 2016A bonds are due 2021 to 2036 with term bonds due in 2039, 2041 and 2043. The serial coupons range from 2% to 5%. The 2039 bonds have a 4% coupon priced at 109.709 and a 5% coupon priced at 121.395. The 2041 bonds have a 2.12% coupon not reoffered and a 4% coupon priced at 109.529. The 2043 bonds have a 4% coupon priced at 109.435.

The 2016B bonds are due 2018 to 2022 with a term bond due in 2046. The serial coupons range from 1.203% to 2.115%, all priced at par. The 2046 bonds have a 3.879% coupon priced at par.

Proceeds will be used to finance capital improvements to the university.

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