Municipals end mixed as some of week's large deals price; California offers $750 million bonds

By Sheri Kasprzak

New York, April 22 - Municipals ended the session mixed, as did Treasuries, amid strong secondary action as the larger offerings of the week hit the market, traders said.

Despite very little secondary market pressure, buyers were a bit more hesitant on Tuesday, said a trader during the afternoon.

"We are experiencing some hesitance," he said. "The buyers that are going to be out there this week are likely looking at the deals that are going to offer the most yield [California, Illinois and New Jersey]."

California brings G.O. bonds

California's $750 million general obligation offering priced during the session.

The state offered $575 million of series 2014 tax-exempt bonds and $175 million of series 2014 taxable bonds.

The tax-exempt bonds are due 2015 to 2032 with a term bond due in 2044. The serial coupons range from 1% to 5% with 0.16% to 3.49% yields. The 2044 bonds have a 4.125% coupon that priced at 98.5 to yield 4.214% and a 5% coupon that priced at 109.036 to yield 3.90%.

The taxable bonds are due May 1, 2019, have a 2.25% coupon and priced at 100.755 to yield 2.09%.

The bonds (A1/A/A) were sold competitively. The state treasurer's office did not immediately respond to requests for the winning bidder.

Proceeds will be used to finance capital projects within the state and repay commercial paper.

Charleston school debt prices

Elsewhere in competitive offerings during the session, the Charleston County School District of South Carolina sold $84,415,000 of series 2014 G.O. bond anticipation notes.

The offering included $34.55 million of series 2014A notes and $49,865,000 of series 2014B notes, said a pricing sheet.

The 2014A notes are due Nov. 4, 2014, have a 5% coupon and priced at 102.407 to yield 0.10%.

The 2014B notes are due May 6, 2015, have a 0.75% coupon and priced at 100.597 to yield 0.15%.

The notes (MIG 1) were sold competitively. BofA Merrill Lynch took the series 2014A notes at a 0.10% true interest cost, and J.P. Morgan Securities LLC won the 2014B portion at a 0.15% TIC, said Michael Bobby, chief of finance and operations for the district.

"We have a schedule that we follow," Bobby said in an interview after the offering priced Tuesday.

"We do a fall and a spring offering within a couple-week period. We have no other strategy. It's short-term debt, and borrowing rates have been good, so we weren't too concerned about [the timing]."

Proceeds will be used to finance capital projects and repay the district's series 2013B BANs.

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