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Municipals rally along with Treasuries after FOMC rate decision; primary calendar thin
By Sheri Kasprzak
New York, Sept. 18 – Municipals were stronger on Friday, following in line with rallying Treasuries, market insiders said. The Federal Open Market Committee elected Thursday to hold the Federal Funds rate steady at 0% to 0.25%.
On Friday, top-rated municipal bonds saw their yields fall by as much as 9 basis points, with the 10-year note yield falling about 7 bps to 2.18% and the 30-year bond yield falling 9 bps to 3.18%.
Meanwhile, Treasuries saw another rally after the Fed’s decision, with the 30-year bond yield falling by 9 bps and the 10-year note yield falling by 8 bps.
The Fed’s move made some market insiders skeptical about a rate hike for 2015. In fact, traders were giving a 52% chance for a January 2016 rate hike Friday.
Wayne airport deal set
Although the Commonwealth of Massachusetts will lead the sparse offerings next week with a $1.2 billion short-term note deal, the Wayne County Airport Authority of Michigan will also be in the market with a significant deal.
The $587.78 million of revenue bonds (A2/A/A-) will be sold through Citigroup Global Markets Inc. and J.P. Morgan Securities LLC on Tuesday.
The deal includes $230.22 million of series 2015D non-AMT bonds due 2017 to 2034, $11,595,000 of series 2015E AMT bonds due 2017 to 2034, $242,695,000 of series 2015F AMT refunding bonds due 2025 to 2034 and $103.27 million of series 2015G non-AMT refunding bonds due 2017 to 2034.
Proceeds will be used to finance the authority’s four-year capital improvement program for the airport, as well as to refund the authority’s series 2001A hotel bonds.
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