Municipal yields slide as market seeks price discovery; Triborough Bridge offering ahead

By Sheri Kasprzak

New York, Dec. 18 - Municipals continued to struggle on Tuesday as the market suffered from a lack of price discovery, traders said.

"It's been another tough one," said a trader in the afternoon. "Yields are up about 3 to 5 basis points. Bids are scarce."

Much like last week, yields were off to a bad start early. Although the losses continued Tuesday, they weren't as bad.

"Rising [municipal/Treasuries] ratios are a reflection of recent muni underperformance," said Alan Schankel, managing director with Janney Montgomery Scott LLC.

"From 88% at November's end, the ratio of the 30-year AAA muni yield to the like maturity Treasury yield has risen to 95%, with the 10-year ratio increasing from 91% to 99%, likely reflecting investor concerns about the impact of federal spending reductions and the potential for tax exemption threatening tax reform."

Bexar brings bonds

Heading up Tuesday's light primary activity, Bexar County, Texas, sold $118 million of series 2013 tax-exempt venue project revenue refunding bonds, according to a pricing sheet.

The deal included $92.12 million of series 2013 combined venue tax bonds and $25.88 million of series 2013 motor vehicle rental tax bonds.

The bonds (A1//A+) were sold through Frost Bank.

Proceeds will be used to refund short-term bonds maturing in August 2013 and other short-term debt.

Triborough deal set

Although new issue volume is expected to be about $4 billion this week, down from $11 billion the previous week, a substantial deal is set to hit the market.

The Triborough Bridge and Tunnel Authority of New York plans to price $904.3 million of series 2012 revenue bonds during the week.

The offering includes $637,985,000 of series 2012C subordinate revenue refunding bonds and $266,315,000 of series 2012D general revenue refunding bonds.

The bonds were originally slated to price last week, but the deal was held up due to market conditions, said one market source familiar with the deal.

Jefferies & Co., Goldman Sachs & Co. and Loop Capital Markets LLC were the senior managers.

Proceeds will be used to refund authority's series 2002E and 2003A revenue bonds.

Colorado preps notes

Looking to Wednesday's pricing activity, the State of Colorado is prepared to price $160 million of series 2012C tax and revenue anticipation notes.

The notes will be sold competitively with RBC Capital Markets LLC as the financial adviser.

The notes are due June 27, 2013, and proceeds from the sale will be used to finance state expenses ahead of the collection of taxes and revenues.

© 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.