Municipals continue to sink as Treasuries turn around; Tampa International Airport bonds price

By Sheri Kasprzak

New York, Oct. 16 - Municipals continued to feel weighed down by an illiquid secondary market, insiders reported.

Bid/ask spreads continued to widen on Wednesday even after the Senate reached a bipartisan agreement to fund the government through Jan. 15 and extend the debt limit until Feb. 7. Municipals retained a weaker tone, with yields up by 2 basis points to 3 bps across the yield curve.

In contrast to municipals, Treasuries saw a turnaround. After the Senate deal was announced Wednesday afternoon, the 30-year Treasury bond yield fell by 7 bps to close out the day at 3.719%, and the 10-year note yield fell 6.5 bps to 2.67%. The five-year note yield shrank by 4 bps to end at 1.40%.

Puerto Rico projects growth

Elsewhere, the Commonwealth of Puerto Rico held a webcast Tuesday to address growing concerns that it could be facing default and bankruptcy. Those rumors were put to rest by the address, which noted that fiscal first-quarter revenues were better than expected at $1.69 billion, up $88 million over the first quarter of fiscal 2013 and exceeding estimates by $10.4 million.

The fiscal year 2014 general fund budget projects revenue growth of $1.74 billion, largely from new tax measures.

The commonwealth also announced that it intends to issue $500 million to $1.2 billion of debt in the remainder of the calendar year.

Alan Schankel, managing director with Janney Montgomery Scott LLC, noted that although the commonwealth has expressed a need to raise money over the next few months, there's sufficient liquidity to avoid tapping the market if market access is limited.

"[Government Development Bank] will be able to finance $389 million maturing in FY14 with internal funds," Schankel said Wednesday.

Tampa airport bonds price

Amid Wednesday's primary action, the Hillsborough County Aviation Authority of Florida priced $168,865,000 of series 2013A AMT subordinate revenue refunding bonds for the Tampa International Airport, said a pricing sheet.

The bonds (A2/A/A) were sold through RBC Capital Markets LLC.

The bonds are due 2014 to 2016 and 2019 to 2030 with 2% to 5.5% coupons and yields from 0.30% to 5.08%.

Proceeds will be used to refund the authority's series 2003A revenue bonds.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.