Muni prices rise as week’s remaining deals price; District of Columbia offers $499.28 million

By Sheri Kasprzak

New York, June 4 – Municipal yields fell on the session Thursday, pushed in part by a rally for Treasuries and by the pricing of the week’s remaining deals, market insiders said.

Yields were lower by 2 to 3 basis points across the curve. Meanwhile, over in Treasuries, the 30-year bond yield fell by 8 bps and the 10-year note yield fell by 7 bps.

It’s been a volatile time for municipals, and investors have been moving their money out of the market. Outflows to muni mutual funds totaled about $170 million for the week ended May 27. Alan Schankel, managing director with Janney Montgomery Scott LLC, said in a note Thursday that he expects outflows to continue, but the data is still forthcoming.

D.C. brings G.O. bonds

Heading up the day’s primary action, the District of Columbia hit the market with $499.28 million of series 2015 general obligation bonds.

The bonds were sold through Citigroup Global Markets Inc.

The bonds are due 2018 to 2038 with a term bond due in 2040, according to a term sheet. The serial bonds have 5% coupons. The 2040 bonds have a 4% coupon and priced at 100.569.

Proceeds will be used to finance capital projects and refund the city’s series 2005B G.O. bonds.

Leander upsizes deal

Among the other offerings priced Thursday, the Leander Independent School District of Texas priced and significantly upsized $475.52 million of series 2015 unlimited tax refunding bonds. The deal was upsized from $304,813,288.60.

The deal included $240 million of series 2015A current interest bonds, $162.97 million of series 2015A capital appreciation bonds, $39 million of series 2015B current interest bonds and $33.55 million of series 2015B capital appreciation bonds.

The 2015A current interest bonds are due 2026 to 2042 with 4% to 5% coupons and 2.72% to 3.89% yields. The 2015A capital appreciation bonds are due 2016 to 2036 with 0% coupons and yields from 0.76% to 4.45%.

The 2015B current interest bonds are due 2029 to 2034 with coupons from 4% to 5% and yields from 3.19% to 3.83%. The 2015B capital appreciation bonds are due 2018 to 2029 with 0% coupons and yields from 1.83% to 4.20%.

The bonds (/AA-/) were sold through William Blair & Co. Inc. and Morgan Stanley & Co. LLC.

Proceeds will be used to refund existing debt.

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