Municipals slip despite stronger Treasuries; Washington Suburban Sanitary sees wider spreads

By Sheri Kasprzak

New York, Nov. 18 – Municipals closed out a busy day for primary action on a weaker note with many deals priced at a concession, traders said.

Yields were higher by 1 basis point to 2 bps, said a trader. Some of the day’s offerings were priced at a concession to recent levels, he noted. This also triggered weakness in secondary trading, he said.

Treasuries, meanwhile, rebounded from Monday’s losses, but munis ignored this.

Washington Suburban prices

Amid the deals going at a concession to recent levels, the Washington Suburban Sanitary District of Maryland came to market with $250 million of series 2014 second series consolidated public improvement bonds.

The bonds (Aaa/AAA/AAA) were sold competitively with J.P. Morgan Securities LLC winning the bid at a 3.486094% true interest cost, said Jim Neustadt, spokesman for the district.

Neustadt said Tuesday that there were six registered bidders for the deal with only four placing bids. The TICs ranged from a 3.486094% low to a high of 3.749238%.

The bonds are due 2015 to 2044 with 2% to 5% coupons and yields from 0.12% to 3.59%.

One trader noted that spreads were wider on Tuesday’s offering than its offering from April. Most notably, the 2044 bonds from Tuesday’s deal were 20 bps lower than the 3.79% yield from its April offering.

Proceeds will be used to fund the construction or reconstruction of water supply facilities, water supply lines and transmission mains, sewage disposal facilities, sewer collection mains and water and sewer pipes in subdivisions.

Spokane sells debt

Elsewhere during the session, the City of Spokane, Wash., offered $181,225,000 of series 2014 water and wastewater system revenue green bonds.

The bonds (Aa2/AA/) were sold competitively, but the issuer did not immediately respond to requests for the winning bidder.

The bonds are due 2015 to 2034 with 3% to 5% coupons and 0.19% to 3.51% yields, according to a term sheet.

Proceeds will be used to finance capital projects to improve the health of the Spokane River, protect the city’s sole drinking water source and make other improvements.

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