Munis cheapen; District of Columbia preps $400 million TRANs; California plans $1.2 billion

By Cristal Cody

Tupelo, Miss., Oct. 31 – Municipals traded 1 basis point to 2 bps cheaper on Friday, a market source said.

“It’s kind of mixed across the curve,” the source said. “Munis struggled alongside Treasuries this week.”

Treasuries moved lower in trading on Friday after the Bank of Japan surprised the market with an announcement that it will increase its quantitative easing program. The 10-year Treasury note yield rose 4 bps to 2.335%.

Montgomery County, Md., is expected to lead next week’s muni deal action with an $821,865,000 offering of general obligation bonds (Aaa/AAA/AAA), according to market sources.

The transaction includes $500 million of series 2014A consolidated public improvement bonds and $321,865,000 of series 2014B consolidated public improvement refunding bonds.

The series 2014A bonds have serial maturities from 2015 through 2034. The series 2014B bonds are due from 2016 through 2029.

The bonds will price competitively on Nov. 6.

Davenport & Co. LLC is the financial adviser for the offering.

Proceeds will be used to finance the costs of capital projects in the county, to refinance all or a portion of outstanding bond anticipation notes and to refund some outstanding G.O. bonds.

Several municipal issuers are in the line-up for the week ahead, insiders said.

“Rather than in the last couple of weeks where we had some high yield and some taxable bonds, this is going to be more focused on the traditional market,” a market source said. “It’ll be a good test of prices and demand.”

District of Columbia to price

The District of Columbia plans to price a $400 million offering of fiscal year 2015 G.O. tax revenue anticipation notes competitively on Wednesday, according to a preliminary official statement.

The TRANs (MIG1/SP-1+/F1+) are due Sept. 30, 2015.

Acacia Financial Group, Inc. and Public Resources Advisory Group, Inc. are the financial advisers.

Proceeds will be used to finance governmental expenses of the district in anticipation of the collection of revenues for fiscal year 2015.

California offers $1.2 billion

Later in November, California plans to price $1,204,325,000 of various purpose G.O. bonds (Aa3/A/A), according to a preliminary official statement.

The deal includes $270 million of federally taxable G.O. bonds, $304,325,000 of tax-exempt G.O. refunding bonds and $630 million of tax-exempt G.O. bonds.

The bonds will price competitively on Nov. 13.

Public Resources Advisory Group is the financial adviser.

Proceeds will be used to fund projects and pay some of the state’s outstanding taxable G.O. commercial paper notes.

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