Municipals close stronger ahead of $7.5 billion of new issues; MTA readies $700 million BANs

By Sheri Kasprzak

New York, Nov. 30 – Municipals were stronger on Monday, following in line with improved Treasuries, as the market awaited a heavier supply, market sources said.

Yields on top-rated municipals were lower by 1 basis point in spots, said traders.

The week of Thanksgiving wrapped little changed with the 10- and 30-year triple-A benchmark yields closing out Friday at 2.11% and 3.12%, respectively.

Muni mutual funds saw $684 million of inflows for the week ended Nov. 25, according to Lipper Inc.

Now that the holiday has wound down, new-issue supply will pick up this week with $7.5 billion of deals expected.

Transportation and higher education offerings are plentiful with deals from the Metropolitan Transportation Authority of New York, the Kansas Department of Transportation and the University of Michigan in the market.

MTA preps offering

Heading up those offering is a $700 million sale of bond anticipation notes from the Metropolitan Transportation Authority.

The authority is on tap to bring the revenue BANs Wednesday on a competitive basis.

The deal includes $628 million of series 2015B-1 tax-exempt bonds and $72 million of series 2015B-2 taxable bonds. The 2015B-2 bonds are divided into six tranches.

Proceeds will be used to finance existing approved transit and commuter projects.

Kansas DOT deal set

Also ahead this week, the Kansas Department of Transportation is ready to price $400 million of highway revenue bonds through Morgan Stanley & Co. LLC.

The bonds (Aa2/AAA/AA+) are due 2025 to 2035.

Proceeds will finance highway projects in the state.

U of Michigan plans bonds

On the education side, the University of Michigan is prepared to price $312.44 million of general revenue bonds.

Morgan Stanley is the senior manager for this offering as well.

The bonds (Aaa/AAA/) will be issued to finance the renovation of student housing, a quadrangle space, an intramural sports building and other capital improvement projects, as well as to refund the university’s series J-1 commercial paper notes and its series 2002, 2008A and 2012F bonds.

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