Municipals softer as new issues price; Florida Finance brings $1.2 billion of hurricane bonds

By Sheri Kasprzak

New York, Feb. 23 – Municipals were softer on the session Tuesday, market insiders said.

Traders said yields on top-rated municipals rose by as much as 5 basis points.

Even so, Treasuries improved, buoyed in part by weaker stocks and oil prices, market sources said. The 10-year benchmark Treasury note yield fell by 3 bps to close the session at 1.74%. The 30-year bond yield ended the day 2 bps lower at 2.605%, and the five-year yield shrank by 2 bps to 1.23%. The two-year yield fell 2 bps to 0.76%.

Meanwhile, the Dow Jones industrial average fell by 188.88 points to 16,431.78, and the Nasdaq declined by 67.02 points to 4,503.58. The S&P 500 ended down 24.23 points at 1,921.27.

Florida hurricane bonds price

Heading up the day’s heavy new-issue action, the Florida State Board of Administration Finance Corp. sold $1.2 billion of series 2016A revenue bonds.

The deal included $550 million of bonds due 2019 and $650 million of bonds due 2021. The 2019 bonds have a 2.163% coupon, and the 2021 bonds a 2.638% coupon. Both priced at par.

The bonds (Aa3/AA/AA) were sold through senior manager J.P. Morgan Securities LLC.

Proceeds will be used to provide cash to the Florida Hurricane Catastrophe Fund for insurance claims and to refund existing bonds.

U of North Carolina sells debt

Elsewhere, the University of North Carolina at Chapel Hill priced $400.95 million of series 2016C taxable general revenue refunding bonds.

The bonds (Aaa/AAA/AAA) were sold through senior managers BofA Merrill Lynch and Wells Fargo Securities LLC.

The bonds are due 2016 to 2028 with a term bond due in 2036. The serial coupons range from 0.70% to 2.779% and all priced at par. The 2036 bonds have a 3.327% coupon and priced at par.

Proceeds will be used to refund the university’s series 2005A revenue refunding bonds and 2007 revenue bonds.

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