Municipals close firmer as new offerings hit the market; secondary action takes a back seat

By Sheri Kasprzak

New York, Sept. 16 – Municipals were somewhat firmer on the session as primary action took precedence over secondary, traders reported.

Yields were lower by 1 to 2 basis points across the curve, said a trader during the afternoon. Municipals largely ignored a mixed Treasuries market in which the yield curve steepened.

Some of the larger deals of the week hit the market Tuesday, led by a slightly downsized deal from the City of Chicago and a competitive sale from Prince George’s County, Md.

Chicago wastewater bonds price

The city set out to price $300,715,000 of the wastewater debt, but priced $292,405,000 of the second-lien bonds (A3/AA-/AA) through BofA Merrill Lynch Tuesday.

The bonds are due 2016 to 2034 with term bonds due in 2039 and 2044. The serial coupons range from 3% to 5%. The 2039 bonds have a 5% coupon priced at 108.727, and the 2044 bonds have a 5% coupon priced at 108.322.

Proceeds will be used to finance wastewater capital projects.

Prince George’s sells debt

Elsewhere during the session, Prince George’s County, Md., brought to market $248,265,000 of series 2014 consolidated public improvement general obligation bonds.

The deal included $217.85 million of series 2014A bonds and $30,415,000 of series 2014B bonds.

The 2014A bonds are due 2015 to 2034 with 2% to 5% coupons. The 2014B bonds are due 2014 to 2017 with 2% to 5% coupons, said a pricing sheet.

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

Proceeds will be used to provide funds to construct, reconstruct, establish, demolish, acquire, rehabilitate or repair certain capital projects, including public schools, roads and bridges, public buildings, police, fire and correctional facilities, community colleges, health and library facilities and environmental resource and storm water management facilities, as well as to refund the county’s series 2004C-F G.O. bonds.

N.J. Educational wraps deal

Also during the session, the New Jersey Educational Facilities Authority sold $199,855,000 of series 2014 higher educational facilities trust fund bonds.

The bonds (/A-/) were sold competitively with Morgan Stanley & Co. LLC winning the bid at a 3.237753% true interest cost, said Christopher Santarelli, spokesman for the New Jersey State Treasurer’s Office.

The bonds are due 2016 to 2029 with 3.5% to 5% coupons and 0.65% to 3.758% yields, said a pricing sheet.

In secondary action, the 5% 2017s were seen trading between 1.05% and 1.076% during the session after pricing at a 1.05% yield.

Proceeds will be used to make grants to public and private institutions of higher education to finance the construction, reconstruction, development, extension and improvement of instructional, laboratory, communication and research facilities.

Palm Beach trades at 3.011%

Moving to other secondary action, Palm Beach County, Fla.’s series 2014A public improvement revenue refunding bonds were seen actively trading Tuesday.

The bonds (Aa1/AA+/AA+) were sold competitively on Sept. 3.

The bonds are due 2015 to 2027 with 3% to 5% coupons. During the session Tuesday, the 3% 2027s traded between 2.885% to 3.115% with a final trade for the day at 3.011%. The bonds priced at 3.05%.

Proceeds will be used to refund the county’s series 2006 and 2007A-C public improvement bonds.

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