Muni yields fall as much as 3 bps as Treasuries are buoyed by data; King County brings bonds

By Sheri Kasprzak

New York, Oct. 27 – Municipal prices rose on the day, pushed by stronger Treasuries, traders reported.

Yields on top-rated municipals fell by as much as 3 basis points with the 10-year bond yield falling to 2.05% and the 30-year yield falling to 3.10%.

Over in Treasuries, weak durable goods orders for October gave evidence that economic growth is slowing. The five-year Treasury note yield responded by falling 3 bps to 1.38%, and the 10-year benchmark note yield fell by 2 bps to 2.05%.

“With a modest new-issue calendar in the week ahead, last week’s issues traded stronger in secondary,” Alan Schankel, managing director with Janney Montgomery Scott LLC, said in a note Tuesday.

“For example, New Jersey Turnpike Authority (A3/A+/A) 30-year bonds with a 5% coupon, [which] priced last week at a 3.70% yield to the nine-year call, had multiple 3.65% block trades Monday afternoon.”

King County deal prices

Among the week’s competitive offerings, King County, Wash., hit the market with $93,345,000 of series 2015B sewer improvement and refunding bonds.

The bonds (Aa2/AA+/) are due 2016 to 2038 with term bonds due in 2040 and 2046. The serial coupons range from 4% to 5% with yields from 0.24% to 3.58%. The 2040 bonds have a 4% coupon and priced at 102.815 to yield 3.65%, and the 2046 bonds have a 4% coupon and priced at 102 to yield 3.75%.

Proceeds will be used to finance capital improvements to the county’s sewer system and to refund the county’s series 2006 sewer revenue and refunding bonds.

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