Municipals improve as demand is strong for new issues, Treasuries rally; California tops slate

By Sheri Kasprzak

New York, April 1 – Municipals were stronger Wednesday as Treasuries rallied amid weaker private sector employment data, market insiders said. Additionally, demand remained strong for the session’s heavy new-issue calendar.

Yields on top-rated munis were down by about 3 basis points, far underperforming Treasuries, which were pushed by a lackluster ADP National Employment Report for March. The 10-year and 30-year Treasury yields fell by about 7 bps.

Meanwhile, investors snapped up new offerings, which were topped by two major California deals.

California DWR brings bonds

Heading up the day’s primary action, the week’s largest deal – California Department of Water Resources’ $759.22 million series 2015O power supply revenue refunding bonds – hit the market.

The bonds (Aa2/AA/AA+) were offered through joint bookrunners J.P. Morgan Securities LLC and RBC Capital Markets LLC with Wells Fargo Securities LLC as the co-senior manager.

The bonds are due 2021 to 2022 with 2% to 5% coupons.

Proceeds will be used to refund the department’s series 2008H and 2010L power supply revenue bonds.

U of California prices debt

Also out of the Golden State, the University of California priced $500 million of series 2015AQ taxable general revenue bonds.

The 100-year bonds (Aa2/AA/AA) were sold through senior managers Barclays and Goldman Sachs & Co.

The bonds are due May 15, 2115, have a 4.767% coupon and priced at par, said the term sheet.

Proceeds will be used to finance or refinance capital expenditures for the university.

Philly offers water bonds

Elsewhere during the day, the City of Philadelphia sold $417.56 million of series 2015 water and wastewater revenue and refunding bonds. The deal was upsized from $367.4 million.

The deal included $275.82 million of series 2015A water and wastewater revenue bonds and $141.74 million of series 2015B water and wastewater revenue and refunding bonds, according to a pricing sheet.

The 2015A bonds have 5% coupons. They are due in 2040 and 2045 with a 3.45% yield and a 3.50% yield, respectively.

The 2015B bonds are due 2019 to 2035 with 4% to 5% coupons and 1.32% to 3.67% yields.

The bonds (A1/A/A+) were sold on a negotiated basis with J.P. Morgan Securities LLC and Loop Capital Markets LLC as the lead managers for the 2015A bonds and BofA Merrill Lynch and Ramirez & Co. Inc. as the senior managers for the 2015B bonds.

Proceeds will be used to finance capital improvements to city’s water and wastewater systems and to refund its series 2005A water and wastewater revenue bonds.

© 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.