Municipals close weaker along with Treasuries; Texas Water Development offers up revenue bonds

By Sheri Kasprzak

New York, Oct. 7 – Municipals fell in sympathy with Treasuries Wednesday after Germany held a third failed auction of its 10-year Bund, market insiders said.

Yields on top-rated munis rose by as much as 2 basis points, said a trader in the afternoon.

Meanwhile, the 10-year benchmark Treasuries note yield rose by 3 bps after the Treasury Department auctioned $21 billion of 10-year notes at a 2.066% yield, the lowest yield since April.

Texas water bonds price

Heading up the day’s primary action, the Texas Water Development Board hit the market with $795,615,000 of series 2015 state water implementation revenue fund for Texas revenue bonds. The offering was downsized from $862,385,000.

The deal included $783.64 million of series 2015A bonds and $11,975,000 of series 2015B taxable bonds.

The 2015A bonds are due 2016 to 2035 with term bonds due in 2040, 2045 and 2050. The serial coupons range from 2% to 5%. The 2040 bonds have a 4% coupon that priced at 114.679 and a 5% coupon that priced at 102.811. The 2045 bonds have a 4% coupon that priced at 114.04 and a 5% coupon that priced at 102.224. The 2050 bonds have a 5% coupon that priced at 101.228.

The 2015B bonds are due 2016 to 2025 with term bonds due in 2030, 2035 and 2050. The serial coupons range from 0.45% to 3.053% and all priced at par. The 2030 bonds have a 3.703% coupon, the 2035 bonds have a 4.248% coupon, and the 2050 bonds have a 4.648% coupon. They all priced at par.

The deal was finalized with downward yield adjustments in a few shorter maturities and 1 bp to 3 bps increases in longer maturities, including a 3 bps increase on 35-year bonds to finalize as a 4% coupon to yield 3.85% to the 10-year call, said a market source familiar with the deal.

The bonds (/AAA/AAA) were sold through senior manager Citigroup Global Markets Inc.

Proceeds will be used to provide funds to political subdivisions in Texas for water projects.

Spring Branch ISD sells bonds

Also out of the Lone Star State, the Spring Branch Independent School District offered $221,325,000 of series 2015 general obligation bonds.

The deal included $65,795,000 of series 2015A limited tax G.O. bonds and $155.53 million of series 2015B unlimited tax G.O. bonds.

The 2015A bonds are due 2016 and 2018 to 2025 with 2% to 5% coupons and 0.18% to 2.17% yields.

The 2015B bonds are due 2016 to 2036 with a term bond due in 2038. The serial coupons range from 2% to 5% with yields from 0.08% to 3.44%. The 2038 bonds have a 4% coupon and priced at 103.754 to yield 3.52%.

The bonds (Aaa/AAA/) were sold through Wells Fargo Securities LLC.

Proceeds will be used to refund existing G.O. debt.

© 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.