Municipals close weaker ahead of Brexit results; MTA ups bond issue to $673.74 million

By Sheri Kasprzak

New York, June 23 – Municipals weakened on Thursday as the market awaited the results of the United Kingdom’s vote on whether to remain in the European Union, insiders said.

The 10-year triple-A bond yield rose by 2 basis points to close at 1.56% and the 30-year bond yield by 3 bps to 2.40%.

Meanwhile, Treasuries were also pressured by the Brexit vote and by a dive in initial jobless claims. The 30-year and 10-year Treasury yields both rose by 5 bps as jobless claims fell by 18,000 to 259,000, much lower than the 273,000 expected by economists.

Looking to muni mutual fund news, inflows continued for the week ended June 15 with $1.6 billion of new assets reported by ICI.

MTA upsizes deal

Moving to new-issue action, the Metropolitan Transportation Authority of New York upsized to $673.74 million its series 2016B transportation revenue refunding bonds from $500 million.

The bonds were sold through bookrunners Morgan Stanley & Co. LLC and Siebert Brandford Shank & Co. LLC.

The bonds are due 2018 to 2037 with 2.125% to 5% coupons.

Yields on the long end were adjusted lower with the 5% of 2037 ending at 2.45% to the 10-year call, a basis point lower than retail, said a market insider familiar with the deal.

Proceeds will be used to refund the authority’s series 2007A, 2008A and 2008B revenue bonds.

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