Municipals close mostly flat ahead of massive calendar; New York City preps $1.05 billion deal

By Sheri Kasprzak

New York, Aug. 1 – Municipals started a busy week on a quiet note, with yields little changed as the market prepared for a massive $14 billion new-issue slate, market sources said.

The 10-year triple-A muni bond yield remained at 1.45%, and the 30-year bond yield stayed at 2.27%.

Meanwhile, Treasuries took a hit on the day, pressured by a significant corporate bond offering from Microsoft Corp. The 30-year bond yield rose by 6 basis points to 2.24%, and the 10-year note yield ended the session 5 bps higher at 1.51%. The two-year yield held steady at 0.67%, and the five-year note yield edged up 3 bps to 1.06%.

New York City headlines

Moving to the week’s new-issue slate, about $14 billion is set to price, led by a substantial general obligation bond sale from the City of New York.

The city will hit the market with $1.05 billion of G.O. bonds (Aaa/AAA) Tuesday through senior manager Goldman Sachs & Co.

The deal includes $800 million of series 2017A-1 tax-exempt bonds due 2018 to 2040, $174,185,000 of series 2017A-2 taxable bonds due 2022 to 2028 and $75,815,000 of series 2017A-3 taxable bonds due 2022 to 2028.

Proceeds will be used for capital purposes.

Wisconsin deal ahead

Looking to other offerings scheduled for pricing Tuesday, Wisconsin will offer $598.13 million of refunding bonds. The deal had been set to price last week but was postponed.

The deal includes $399.83 million of taxable refunding bonds due 2019 to 2027 and $198.3 million of taxable refunding bonds due 2018 to 2037.

Stifel, Nicolaus & Co. and Ramirez & Co. Inc. are the senior managers for the deal.

Proceeds will be used to refund the state’s series 2003 and 2009 state appropriation bonds.

Las week, the state priced $370.85 million of G.O. refunding bonds via RBC Capital Markets LLC.

The bonds are due 2021 to 2030 with 1.5% to 5% coupons and 0.97% to 2.07% yields.

Proceeds will be used to refund existing G.O. debt.

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