Municipals weaken in sympathy with Treasuries on FOMC meeting; Virginia Resources bonds price

By Sheri Kasprzak

New York, Sept. 17 – Municipals were somewhat softer on the session, following in sympathy with Treasuries, which closed weaker on the Federal Open Market Committee’s September meeting, market insiders said.

Yields were seen higher by 1 to 2 basis points across the curve with short bonds experiencing the most weakness, traders said in the afternoon.

Meanwhile, the five-year Treasury note yield, which is most impacted by policy, climbed by 4 bps on the day.

Virginia Resources bonds price

Amid the new-issue supply on the session, the Virginia Resources Authority hit the market with $184,665,000 of series 2014 revenue bonds.

The deal included $5.73 million of series 2014A clean water state match revenue bonds (MIG 1/SP-1+/F1+) and $178,935,000 of series 2014B clean water state revolving fund revenue refunding bonds (Aaa/AAA/AAA), said a pricing sheet.

The 2014A bonds are due April 1, 2015, have a 1% coupon and priced at 100.457 to yield 0.09%. The 2014B bonds are due 2015 to 2031 with 2% to 5% coupons and yields from 0.13% to 3.21%.

The bonds were sold competitively.

Proceeds will be used to provide a state grant match equal to 20% of federal capitalization grants for clean water projects and to refund the authority’s series 2007 and 2008 revenue bonds.

Prince George’s details deal

Elsewhere during the session, Prince George’s County, Md., released additional information on its $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.

The bonds (Aaa/AAA/AAA) were sold competitively. BofA Merrill Lynch won the series 2014A bonds at a 2.679% true interest cost, and Citigroup Global Markets Inc. won the 2014B bonds at a 0.359% TIC, said Stephen McGibbon, deputy director of finance for the county.

“The county may issue various types of debt and alternative structures to the extent permitted by state and local law,” McGibbon said in an interview Wednesday.

“Based upon the projects to be financed, the office of finance is charged with the responsibility of determining the appropriate type of debt obligation to utilize. In this transaction, it was to the county’s advantage to conduct a competitive, tax-exempt offering to the marketplace.”

Proceeds will be used to provide funds to construct, reconstruct, establish, demolish, acquire, rehabilitate or repair 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. higher ed bonds trade

Moving to secondary action, the New Jersey Educational Facilities Authority’s series 2014 higher educational facilities trust fund bonds were trading heavily during the day, traders reported.

On Wednesday, the 3.5% 2027s were seen trading between 3.348% and 3.648%. At the end of the day, the bonds were trading at 3.598%. The bonds initially priced at a 3.598% yield.

The bonds (/A-/) were sold competitively Tuesday with Morgan Stanley & Co. LLC winning the bid at a 3.237753% TIC, 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.

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.

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