Munis firm; Florida Board of Education readies deal; Houston offers $800 million G.O. bonds

By Cristal Cody

Tupelo, Miss., Feb. 2 – Municipal bond yields traded about 1 basis point to 2 bps tighter across the curve on Tuesday as Treasuries rallied, according to market sources.

Yields firmed about 1 bp on short-dated notes and 2 bps on the 30-year bond.

Treasuries rallied across the curve amid a stock sell-off and volatile crude oil prices. The benchmark 10-year note yield fell 10 bps to 1.83%, and the 30-year bond yield rallied to 2.64% from 2.74% on Monday.

The Dow Jones industrial average dropped 295.64 points, or 1.8%, to 16,153.54 on Tuesday.

Primary supply expected over the week includes a $118.43 million offering of public education capital outlay refunding bonds from the Florida Board of Education on Wednesday.

Houston is in the deal pipeline with $800 million of revenue and refunding bonds.

Also, Montgomery County of Maryland is marketing $156,255,000 of general obligation bonds for a transaction set to price in March.

Florida BOE to price

The Florida Board of Education is set to price $118.43 million of public education capital outlay refunding bonds via a competitive offering on Wednesday, according to a notice of sale.

The series 2016A bonds (Aa1/AAA/AAA) have serial maturities from 2017 through 2028.

The Florida Division of Bond Finance is the financial adviser.

Proceeds will be used to refund a portion of series 2007A public education capital outlay refunding bonds.

Houston preps $800 million

Houston intends to price $800 million of series 2016B combined utility system first-lien revenue and refunding bonds (Aa2//AA), according to a preliminary official statement.

Wells Fargo Securities, LLC is the bookrunner for the negotiated sale.

Proceeds will be used to help pay the costs to construct, improve or repair the water and sewer system; refund all or a portion of outstanding series B combined utility system commercial paper notes and refund a portion of outstanding combined utility system first-lien revenue bonds.

Montgomery offers G.O. bonds

Looking ahead, Maryland’s Montgomery County is marketing $156,255,000 of G.O. bonds (Aaa/AAA/AAA), according to a preliminary official statement.

The series A consolidated public improvement refunding bonds have serial maturities from 2018 through 2031.

The bonds will be offered via a competitive sale on March 26.

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

Proceeds will be used to refund certain outstanding G.O. bonds.

Connecticut Housing Finance Authority markets bonds

Also on the deal calendar, the Connecticut Housing Finance Authority plans to price $145 million of housing mortgage finance program bonds (Aaa/AAA), according to a preliminary official statement.

The deal includes $100,455,000 of subseries A-1 bonds and $44,545,000 of subseries A-2 bonds.

The A-1 bonds have term maturities due Nov. 15, 2026, Nov. 15, 2030, Nov. 15, 2035, May 15, 2040 and Nov. 15, 2045.

The A-2 bonds have maturities from Nov. 15, 2016 through Nov. 15, 2026.

The managers of the negotiated sale are BofA Merrill Lynch, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, Barclays, Citigroup Global Markets Inc., Drexel Hamilton, LLC, Fidelity Capital Markets, Janney Montgomery Scott, Ramirez & Co., Inc., Raymond James, Rice Financial Products Co., Roosevelt & Cross Inc. and Wells Fargo.

Proceeds will be used to refund outstanding bonds and for the financing of permanent home mortgage loans.

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