Municipal yields cheapen somewhat on weaker Treasuries; Dasny prices largest sale of the week

By Sheri Kasprzak

New York, Sept. 11 - Municipal yields were a touch off on Tuesday in line with weaker Treasuries, traders said.

"Investors are really responding positively to new issues, but Treasuries are off this afternoon," a trader said.

"We seem to be in a slump along with Treasuries. The technicals still look good."

Another trader said early in the session yields were improved after secondary action picked up and new issues saw strong bids.

"Later in the afternoon, yields kind of fell off with Treasuries," she said.

Yields were seen off by 1 basis point to 2 bps, especially outside of 10 years.

Dasny brings $234.72 million

Heading up the week's primary action, the Dormitory Authority of the State of New York came to market with $234.72 million of series 2012A lease revenue bonds for state university dormitory facilities, said a pricing sheet.

The bonds (Aa2/AA-/) were sold through lead managers Ramirez & Co. Inc. and Jefferies & Co. Inc.

The bonds are due 2013 to 2032 with term bonds due in 2037 and 2042. The serial coupons range from 2% to 5%. The 2037 bonds have a 5% coupon and priced at 114.02, and the 2042 bonds have a 5% coupon and priced at 113.483.

Proceeds will be used to finance the construction of dormitory facilities at various state universities as well as to refund existing debt.

Missouri offers G.O. bonds

In other pricings, the State of Missouri brought $171.9 million of series 2012 general obligation refunding bonds in two tranches, said pricing sheets.

The deal included $65.79 million of series 2012A state water pollution control G.O. refunding bonds and $106.11 million of series 2012A fourth state building G.O. refunding bonds.

The water pollution bonds are due 2013 to 2019 with 3% to 4% coupons. The fourth state building bonds are due 2013 to 2021 with 2% to 4% coupons.

The bonds (Aaa/AAA/AAA) were sold competitively with Bank of America Merrill Lynch coming in with the lowest true interest cost at 0.757607%. The cover bid came from Citigroup Global Markets Inc. with a 0.758614% TIC.

Proceeds will be used to refund the state's series 2002A-B state water pollution control G.O. bonds and its series 2002A fourth state building G.O. bonds.

Massachusetts housing deal set

In other major offerings coming during the week, the Massachusetts Housing Finance Agency plans to price $158.31 million of series 2012 taxable housing bonds in two tranches.

The bonds will be sold through senior managers Bank of America Merrill Lynch and Raymond James/Morgan Keegan.

The offering includes $107.05 million of series 2012C bonds, which are due 2013 to 2023 with term bonds due in 2027, 2032, 2037 and 2043, and $51.26 million of series 2012D bonds, which are due 2013 to 2017.

The agency intends to use the proceeds to purchase Treasury obligations.

In August, the agency came to market with $75.35 million of housing bonds with 0.2% to 4.02% coupons, all priced at par.

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