Munis firm; Palm Beach County gains ‘huge’ savings; Massachusetts Water Resources markets bonds

By Cristal Cody

Eureka Springs, Ark., March 29 – Municipal bonds tightened as Treasuries rallied after Federal Reserve chair Janet Yellen’s comments at the Economic Club of New York on Tuesday alleviated worries of an April interest rate hike.

Municipal bonds traded about 4 basis points to 5 bps tighter in the belly of the curve, a market source said.

The 10-year Treasury yield closed 8 bps lower at 1.78%.

In new issuance over the session, Florida’s Palm Beach County priced $126,645,000 of revenue refunding bonds.

“It produced a huge savings for us to the tune of 13.2% in the present value savings,” Mark Braun, debt manager for Palm Beach County, told Prospect News. “In dollars, it’s a little over $18.7 million.”

Braun attributed the achievement in part to the county’s good credit rating.

“That was a big driver, and it was just a good week in the market,” he said.

In other new issuance, the Indiana Finance Authority detailed its offering of $115.79 million of state revolving fund program green bonds.

Market analysts estimate about $6 billion of municipal bond volume for the week.

The Massachusetts Water Resources Authority is in the deal pipeline with $535 million of revenue and revenue refunding bonds.

Coming up in the first week of April, the city and county of San Francisco is on tap to price a $179.42 million three-part offering of general obligation bonds.

Palm Beach County prices

Palm Beach County of Florida priced $126,645,000 of revenue refunding bonds on Tuesday, according to a market source and term sheet.

The series 2016 bonds (Aa1/AA+/AA+) are due May 1, 2019 through May 1, 2038 and priced with 5% coupons to yield 0.87% to 2.78%.

The bonds were sold through a competitive offering on Tuesday. Raymond James/Morgan Keegan was the winning bidder with a 3.079% true interest cost.

Proceeds from the deal will be used to pay and defease a portion of the county’s outstanding series 2008 public improvement revenue bonds.

Indiana Finance sells

The Indiana Finance Authority sold $115.79 million of state revolving fund program green bonds (Aaa/AAA/AAA) in two tranches, according to an official statement.

The authority sold $62,675,000 of series 2016A state revolving fund program bonds with 4% to 5% coupons to yield 0.57% to 2.75% across the serial maturities from 2017 through 2036.

In the second tranche, the authority priced $53,115,000 of series 2016B state revolving fund program refunding bonds due 2020, 2021, 2022, 2027 and 2028 with 5% coupons and yields ranging from 1.08% to 2.23%.

BofA Merrill Lynch and Goldman Sachs & Co. were the bookrunners of the negotiated sale.

Proceeds will be used to provide loans for eligible projects and to refund and defease certain outstanding bonds.

Massachusetts Water deal ahead

Coming up in the deal pipeline, the Massachusetts Water Resources Authority is marketing $535 million of revenue and revenue refunding bonds (Aa1/AA+/AA+), according to a preliminary official statement.

The transaction includes $85 million of series 2016B general revenue bonds and $450 million of series 2016C general revenue refunding green bonds.

Citigroup Global Markets Inc., Barclays, BofA Merrill Lynch, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are the senior managers.

Proceeds will be used to finance capital improvements and repay outstanding debt.

San Francisco preps sale

In April, the city and county of San Francisco plans to price $179.42 million of general obligation bonds (Aa1/AA+/AA+) in three tranches, according to a preliminary official statement.

The deal includes $25,215,000 of series 2016C earthquake safety and emergency response bonds, $110.06 million of series 2016D earthquake safety and emergency response bonds and $44,145,000 of series 2016E road repaving and street safety bonds.

The bonds will price via a competitive sale on April 5.

Kitahata & Co. and Fieldman, Rolapp & Associates, Inc. are the co-financial advisers.

The proceeds will be used to fund improvements to fire, earthquake and emergency response infrastructure; fix potholes; repave failing streets; repair and strengthen stairways, bridges and overpasses; and construct and renovate the city’s traffic infrastructure.

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