Municipals rally along with Treasuries in wake of Brexit vote; yields fall by as much as 17 bps

By Sheri Kasprzak

New York, June 24 – Municipals closed out a volatile session on a stronger note with yields falling as much as 17 basis points after the United Kingdom voted to leave the European Union, market insiders.

The market followed in line with Treasuries, which rallied as stocks took a dive.

The 10-year triple-A muni bond yield fell by 17 bps to 1.40%, and the 30-year yield fell 17 bps to 2.12%.

Over in Treasuries, the 10-year benchmark note yield dove by 17 bps to 1.57%, and the 30-year bond yield ended the session 13 bps lower at 2.42%. The five-year note yield fell 17 bps to 1.08%, and the two-year yield note dropped 14 bps to 0.64%.

Stocks took a dive on the Brexit vote with the Dow Jones industrial average falling 610.32 points to 17,400.75 and the Nasdaq dropping 202.06 points to 4,707.98. The S&P 500 fell by 75.91 points to 2,037.41.

Washington deal ahead

Looking to the upcoming week’s supply, about $8.2 billion of new offerings are expected, about the same as the calendar for the week just ended.

The State of Washington is scheduled to price $1,301,205,000 of series 2017 general obligation bonds (Aa1/AA+/AA+) in four tranches on Tuesday.

The deal includes $392,265,000 of series 2017A various purpose bonds due 2024 to 2041, $101,345,000 of series 2017T taxable G.O. bonds due 2017 and 2019 to 2034, $535,125,000 of series R-2017A various purpose G.O. refunding bonds due 2017 and 2019 to 2034 and $272.47 million of series R-2017B motor vehicle fuel tax G.O. refunding bonds due 2017 and 2020 to 2024.

Proceeds will be used to finance state capital projects and refund existing G.O. debt.

© 2015 Prospect News.
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