Municipals close session mixed; University of California brings $2.01 billion; New York prices

By Sheri Kasprzak

New York, Sept. 26 - Municipals rounded out the session mixed, but yields were not moved by much, traders said.

"The market seems to be taking a pause right now," said a trader reached during the afternoon.

"I think we're waiting to see how the new batch of deals are absorbed."

Meanwhile, the U.S. Census released data this week that showed state and local government tax revenue rose to $382 billion during the second quarter from $356 billion in the second quarter of 2012.

"This was the 15th straight quarter of year-over-year growth and is an important and positive trend for the U.S. municipal market issuers, especially state and local governments," said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC.

U of California bonds price

Heading up the day's primary action was the week's largest deal. The University of California brought to market $2,008,550,000 of series 2013 general revenue bonds in four tranches, said a pricing sheet.

The bonds (Aa1/VMIG 1//AA+) were sold through senior manager Barclays.

The deal included $546,235,000 of series 2013AI bonds, $712,315,000 of series 2013AJ taxable bonds, $600 million of series 2013AK bonds and $150 million of series 2013AL variable-rate demand bonds.

The 2013AI bonds are due 2031 to 2034 with a term bond due in 2038. The serial coupons range from 4% to 5% with 4.15% to 4.19% yields. The 2038 bonds have a 4.5% coupon priced at 98.53 to yield 4.60% and a 5% coupon priced at 105.14 to yield 4.34%.

The 2013AJ bonds are due 2014 to 2024 with a term bond due in 2031. The serial coupons range from 0.25% to 3.789% and all priced at par. The 2031 bonds have a 4.601% coupon and priced at par.

The 2013AK bonds are due in 2048 with a 3.25% coupon priced at 101.237 to yield 3.10% and a 5% coupon priced at 115.695 to yield 3.10%.

The 2013AI bonds are due May 15, 2048. Those bonds initially bear interest at the term rate for an initial yield of 0.06%.

Proceeds will be used to refund and restructure about $2.4 billion of outstanding California State Public Works Board lease revenue bonds.

NYC brings G.O. bonds

In other offerings, the City of New York priced $717,755,000 of series 2014 general obligation bonds, said a pricing sheet.

The deal included $300 million of series 2014D bonds, $368,805,000 of series 2014E bonds and $48.95 million of series 2014F bonds.

The 2014D bonds are due 2015 to 2033 with 3% to 5% coupons. The 2014E bonds are due 2014 to 2033 with coupons from 5% to 5.5%. The 2014F bonds are due 2014 to 2032 with coupons from 2% to 5%.

The bonds (Aa2//AA) were sold through Siebert Brandford Shank & Co. LLC.

Proceeds will be used to finance capital expenditures within the city.

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