Municipals improve as week’s largest offerings price; Georgia sells $1.37 billion G.O. bonds

By Sheri Kasprzak

New York, June 8 – Municipals were better again on Wednesday after the last of the week’s billion-dollar offerings hit the market, said traders.

The 10-year triple-A muni bond yield fell by 2 basis points to close at 1.62%, and the 30-year bond yield also fell by 2 bps to 2.55%.

Treasuries, meanwhile, were flat to slightly better on Wednesday.

Georgia brings G.O. bonds

The week’s largest deal was upsized. Georgia sold $1,370,705,000 of series 2016 general obligation bonds, upsized from $1,367,335,000.

The offering was comprised of $361.84 million of series 2016A G.O. bonds, $358,325,000 of series 2016A-2 G.O. bonds, $199.87 million series 2016B taxable G.O. bonds, $359,045,000 of series 2016C-1 G.O. refunding bonds, $23.98 million of series 2016C-2 G.O. refunding bonds and $67,645,000 of series 2016D taxable G.O. refunding bonds.

The 2016A bonds are due 2017 to 2026 with 2% to 5% coupons.

The 2016A-2 bonds are due 2027 to 2036 with 2.5% to 5% coupons.

The 2016B bonds are due 2017 to 2036 with coupons from 1.91% to 2.96%.

The 2016C-1 bonds are due 2017 to 2027 with 1.75% to 5% coupons.

The 2016C-2 bonds are due July 1, 2033, have a 2% coupon and priced at 103.707 to yield 1.44%.

The 2016D bonds are due 2017 to 2026 with coupons from 2% to 3%.

The bond (Aaa/AAA/AAA) were sold competitively.

Proceeds will be used to finance capital projects and refund existing G.O. bonds.

Maryland sells debt

Also during the session, Maryland sold $1,036,000,000 of first series 2016 tax-exempt G.O. bonds.

The bonds (Aaa/AAA/AAA) were sold competitively with BofA Merrill Lynch winning the bid at a true interest cost of 2.17%. There were four bidders for the deal.

The bonds are due 2019 to 2031 with 3% to 5% coupons and yields from 0.82% to 2.69%.

Proceeds will be used to finance the acquisition and construction of state facilities; capital grants to local governments for public schools, community colleges and jails and correctional facilities; and matching-fund loans and grants to local governments, nonprofit institutions and other entities for hospitals, cultural projects and other projects.

“This was a great bond sale for Maryland,” said Nancy Kopp, Maryland’s treasurer, in a statement.

“Conditions in the global capital market contributed to a very favorable yield on our 15-year debt, resulting in Maryland receiving the lowest rate since August 2012.”

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