Munis hold steady; week’s supply expected to hit $10 billion; California to price $2.3 billion

By Sheri Kasprzak

New York, March 7 – Municipals rounded out a quiet day unchanged on Monday as the market readied for $10 billion of new-issue supply to hit the market this week, insiders said.

The 10-year bond yield ended at 1.88% and the 30-year yield at 2.91%.

The market shook off some losses for the Treasuries market, which was still reeling from improved nonfarm payrolls numbers. The 30-year Treasury bond yield rose by 1 basis point to 2.71%, the 10-year benchmark note yield ended the day 3 bps higher at 1.91%, the five-year note yield was 4 bps higher at 1.42%, and the two-year yield rose 3 bps to 0.91%.

California plans bond deal

The week’s largest offering comes from the State of California, which is expected to price $2.3 billion of general obligation bonds (Aa3/AA-/A+) on Tuesday.

The deal includes $830 million of various purpose bonds, $65 million of school facilities bonds, $1,155,000,000 of various purpose G.O. refunding bonds and $250 million of mandatory put bonds.

The bonds will be sold through Goldman Sachs & Co. and Citigroup Global Markets Inc. with Siebert Brandford Shank & Co. LLC and U.S. Bancorp Investments Inc. as the co-senior managers.

The state plans to use the proceeds for various capital projects, including school projects, to repay commercial paper notes and to refund existing bonds.

Empire State Development set

Coming up on Wednesday, the Empire State Development Corp. will offer $1,230,130,000 of state personal income tax revenue bonds (/AA+/AAA).

BofA Merrill Lynch, Citigroup, Goldman Sachs and Ramirez & Co. Inc. are the senior managers for the bonds, which are due 2018 to 2038.

Proceeds will refund existing debt.

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