Municipals weaken with Treasuries as new issues price; North Texas Tollway sells $768 million

By Sheri Kasprzak

New York, Sept. 10 – Municipals rounded out Thursday on a weaker note, following in the footsteps of Treasuries, which were knocked around by a stock rally, market insiders said.

Yields on top-rated municipals were lower by 1 basis point to 2 bps, following closely with Treasuries’ performance.

The 30-year Treasury bond yield rose by 2 bps to close at 2.98%, and the 10-year yield rose by 2 bps to 2.23%. The five-year yield climbed by 2 bps to 1.55%, and the two-year yield held steady at 0.75%.

During the session, the Treasury Department auctioned $13 billion of 30-year bonds at a high yield of 2.98%.

North Texas upsizes deal

Heading up the day’s primary action, the North Texas Tollway Authority hit the market with its $768.11 million of series 2015B system first-tier revenue refunding bonds. The offering was upsized from $750 million.

The bonds (A1/A/) were sold through Barclays and Loop Capital Markets LLC.

The bonds are due 2016 to 2035 with term bonds due in 2040 and 2045. The serial coupons range from 4% to 5%. The 2040 bonds have a 5% coupon and priced at 106.768, and the 2045 bonds have a 5% coupon and priced at 107.675.

Proceeds will be used to refund a portion of the authority’s series 2008A-B and 2009A revenue bonds.

Austin prices bonds

Another significant deal came from the City of Austin, Texas, which sold $304,045,000 of series 2015 certificates of obligation and public improvement bonds.

The offering included $43,465,000 of series 2015 certificates of obligation, $236.13 million of series 2015 public improvement bonds, $10 million of series 2015 taxable public improvement bonds and $14.45 million of series 2015 public property contractual obligations.

The certificates are due 2016 to 2035 with 2% to 5% coupons.

The public improvement bonds are due 2016 to 2035 with coupons from 2% to 5%.

The taxable public improvement bonds are due 2016 and 2018 to 2035 with 2.892% to 4.268% coupons.

The contractual obligations are due 2016 to 2022 with 2% to 5% coupons.

The bonds (Aaa/AAA/AAA) were sold through Jefferies & Co.

Proceeds will be used to finance public improvements and refund a portion of the city’s outstanding bonds for interest savings.

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