Municipals improve slightly even as Treasuries cheapen; Dasny brings $1.04 billion state PITs

By Sheri Kasprzak

New York, July 17 - Yields were seen firmer by a couple of basis points, market sources reported, even as Treasuries cheapened.

The recent momentum of the market seemed to push yields, said one trader, as new issues hit the market at good levels and the largest sale of the week priced.

"All things considered, it wasn't bad, but just not as good as we've been doing," a trader said.

"Given the way Treasuries are going this afternoon, we're doing all right. The supply-demand dynamic is good. New offerings are coming in at solid levels."

Between retail order periods and a billion-dollar deal from the Dormitory Authority of the State of New York, new issues will likely be well absorbed, said another trader.

Dasny brings $1.04 billion

Heading up the day's primary action, Dasny brought to market $1,044,375,000 of series 2012 state personal income tax revenue bonds, according to a pricing sheet.

The deal included $982,515,000 of series 2012B tax-exempt bonds and $61.86 million of series 2012C taxable bonds.

The bonds (/AAA/AA) were sold competitively with J.P. Morgan Securities LLC winning the 2012B bonds at a 3.480475% true interest cost and Bank of America Merrill Lynch winning the 2012C bonds at a 1.816232% TIC, authority spokesman Beau Duffy said Tuesday.

The 2012B bonds are due 2014 to 2035 with term bonds due in 2037 and 2042. The serial bonds have 5% coupons. The 2037 bonds have a 5% coupon and priced at 115.268, and the 2042 bonds have a 5% coupon and priced at 114.82.

The 2012C bonds are due 2014 to 2022 with 0.5% to 2.32% coupons. They all priced at par.

Deal is most recent PIT

Proceeds will be used to finance capital projects for the State University of New York for educational and hospital facilities and for the City University of New York for senior college and community college facilities. They will also be used to finance capital grants under the HEAL NY Grant Program and make contributions to the costs of remediating hazardous waste sites.

Tuesday's sale is one of several PIT offerings the authority has priced recently, said Duffy.

"We've been to the market a lot with PITs recently," he noted.

On June 14, Dasny priced $1,814,925,000 of series 2012A state PIT revenue bonds on a negotiated basis with Goldman Sachs & Co. as the senior manager.

Those bonds are due 2017 to 2033 with 1.5% to 5% coupons.

Duffy said that New York Gov. Andrew Cuomo announced that some of the HEAL NY grants that will be funded through Tuesday's bonds have been awarded. The names of the recipients, however, were not immediately available.

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