Municipal yields improve by up to 5 bps; California State Public Works brings $408.97 million

By Sheri Kasprzak

New York, April 10 - Municipal yields were lower by 4 basis points to 5 bps, following closely in line with improved Treasuries, market insiders said as the bulk of the week's new offerings priced and secondary activity remained active.

Supply pressure is almost non-existent with continued light action in the primary market. Despite this light activity, a trader said Thursday that secondary activity remains solid.

"I would say today we've seen things pick up quite a bit from where they had been the past few weeks," the trader said.

Meanwhile, Treasuries improved on the session. The 30-year bond yield dropped by 4.5 bps to end the session at 3.519%. The five-year note yield fell by 5 bps to 1.589%, and the 10-year note yield dropped by 4 bps to 2.648%.

California Public Works prices

Moving to Thursday's primary action, the California State Public Works Board hit the market with $408.97 million of series 2014 lease revenue bonds.

The offering included $255.98 million of series 2014B Judicial Council of California Bonds for New Stockton Courthouse and $152.99 million of series 2014C Department of Corrections and Rehabilitation bonds for North Kern State Prison, said a pricing sheet.

The 2014B bonds are due 2018 to 2034 with a term bond due in 2039. The serial bonds have 5% coupons. The 2039 bonds have a 5% coupon and priced at 106.787.

The 2014C bonds are due 2014 to 2034 with coupons from 1% to 5.25%.

The bonds (A2/A-/A-) were sold through joint senior managers Siebert Brandford Shank & Co. LLC and Stifel, Nicolaus & Co.

Proceeds will be used to finance the construction and improvement of the courthouse and the prison.

San Antonio sells debt

In other primary activity, the City of San Antonio offered up $203.93 million of series 2014 water system junior lien revenue and refunding bonds.

The deal included $103.93 million of series 2014A bonds and $100 million of series 2014B variable-rate bonds, according to a pricing sheet.

The 2014A bonds are due 2015 to 2029 with 2% to 5% coupons and 0.16% to 3.27% yields.

The 2014B bonds are due May 1, 2044, have a 1.50% initial coupon and priced at par.

The bonds (Aa2/AA/AA) were sold through senior manager Barclays.

Proceeds will be used to finance capital improvements and refund existing debt.

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