Municipals slide with Treasuries; California offers $764.41 million general obligation bonds

By Sheri Kasprzak

New York, Aug. 28 - Municipals weakened on Wednesday along with Treasuries, as market insiders expected. When municipals firmed Tuesday, insiders were skeptical that it was a trend and instead suggested it was in response to headlines and improved Treasuries.

Municipal yields were up 2 basis points to 4 bps across the curve. Meanwhile, Treasuries saw a climb of 6 bps to 7 bps.

Most of the week's larger offerings have already priced, said a trader. Selling pressure is also a factor in the continuing climb in yields for municipals, he noted.

"I think we're following Treasuries pretty closely right now," he noted.

California brings G.O. bonds

In other news, details were released in the State of California's $764,405,000 sale of series 2013 various purpose general obligation bonds, said a pricing sheet.

The deal included $50 million of series 2013A G.O. bonds, $155 million of series 2013 various purpose G.O. bonds, $360,495,000 of series 2013 various purpose refunding bonds and $198.91 million of series 2013B G.O. refunding bonds.

The 2013A bonds are due Sept. 1, 2022, have a 5% coupon and priced at 114.112 to yield 3.18%.

The 2013 various purpose bonds are due 2024 to 2027 with a term bond due in 2029. The serial bonds have 5% coupons with 3.64% to 4.22% yields. The 2029 bonds have a 5.25% coupon and priced at 106.635 to yield 4.42%.

The 2013 various purpose refunding bonds are due 2024 to 2033 with coupons from 5% to 5.25% and yields from 3.64% to 4.80%.

The 2013B refunding bonds are due 2014 to 2023 with coupons from 4% to 5% and yields from 0.20% to 3.41%.

The bonds (A1/A/A) were sold competitively.

Proceeds will be used to fund certain capital projects, repay outstanding commercial paper and current refund debt for a debt service savings.

Guam sells airport debt

The Government of Guam was also in the market Wednesday with one of its first airport offerings in about 10 years. The government sold $202.38 million of series 2013 airport general revenue bonds, said a pricing sheet.

The bonds (Baa2) were sold through Citigroup Global Markets Inc.

The offering includes $14.62 million of series 2013A non-AMT bonds, $33,675,000 of series 2013B non-AMT bonds and $154,085,000 of series 2013C AMT bonds.

The 2013A bonds are due 2014 to 2023 with 3% to 5% coupons.

The 2013B bonds are due 2014 to 2018 with term bonds due in 2023, 2033 and 2043. The serial coupons range from 3% to 5%. The 2023 bonds have a 5% coupon and priced at 100.783, and the 2033 bonds have a 5.5% coupon and priced at 99.157. The 2043 bonds have a 5.75% coupon and priced at par.

The 2013C bonds are due 2014 to 2023 with term bonds due in 2034 and 2043. The serial coupons range from 3% to 6%. The 2034 bonds have a 6% coupon priced at 99.404 and a 6.25% coupon priced at 99.532. The 2043 bonds have a 6.125% coupon priced at 98.576 and a 6.375% coupon priced at 98.613.

Proceeds will be used to refund existing debt and provide funding for the airport's capital investment program.

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