Municipals close unchanged to slightly better; North Carolina brings to market $199.04 million

By Sheri Kasprzak

New York, April 30 - Municipals were little changed to somewhat better on Wednesday, with long bonds improving the most, traders reported.

Yields for short bonds were flat, but past 20 years, yields were seen lower by about a basis point.

This is in contrast to a Treasury rally sparked by the Federal Open Market Committee's decision to hold short-term rates steady.

The yield of the five-year Treasury note, which is most sensitive to monetary policy, fell by 6 bps to end the day at 1.682%. The 10-year note yield fell by 4.5 bps to 2.65%, and the 30-year bond yield fell by 3 bps to 3.463%.

Not only did the Federal Reserve keep the interest rates unchanged, it also lowered its bond-buying pace by another $10 billion, the fourth consecutive meeting at which this was done.

North Carolina brings debt

Moving to the day's primary activity, the State of North Carolina hit the market with $199.04 million of series 2014B limited obligation refunding bonds.

The bonds (Aa1/AA+/AA+) were sold competitively. J.P. Morgan Securities LLC won the bid at a 2.438% true interest cost. There were six bidders for the offering.

The bonds are due 2017 to 2026 with 5% coupons and yields from 0.74% to 2.76%, said a pricing sheet.

Proceeds will be used to refund the state's series 2004, 2004A, 2005A, 2006A and 2007A limited obligation bonds.

The state refunded various issues of previously sold certificates of deposit and lease-purchase revenue bonds that provided funding for various state projects, repairs and renovations, said Schorr Johnson, spokesman for the state treasurer's office.

The state will see a net present value savings of $23.15 million, or more than 10.6%, Johnson said.

"We regularly monitor market conditions and analyze for refunding opportunities," he noted.

Stanford bonds price

Elsewhere during the day, the California Educational Facilities Authority sold $403,095,000 of series U revenue bonds for Stanford University.

The deal included $124,115,000 of series U-5 bonds and $278.98 million of series U-6 bonds, said a pricing sheet.

The series U-5 bonds are due May 1, 2021, have a 5% coupon and priced at 121.219. The series U-6 bonds are due May 1, 2045, have a 5% coupon and priced at 125.458.

The bonds (Aaa/AAA/AAA) were sold on a negotiated basis. Goldman Sachs & Co. and Barclays were the senior managers for the series U-5 bonds, and Wells Fargo Securities LLC and Barclays were the underwriters for the series U-6 bonds.

Proceeds will be used to finance or refinance capital projects and redeem commercial paper notes.

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