Municipal yields fall as much as 2 bps as supply hits market; Nashville, Davidson bonds price

By Sheri Kasprzak

New York, July 21 – Municipals rounded out a busy session with prices on top-rated bonds up, market sources said.

Yields on some top-rated munis were lower by as much as 2 basis points, said a trader in the afternoon, as new issues were snapped up.

Meanwhile, the market turned its attention to Wednesday’s institutional sale of the Dormitory Authority of the State of New York’s $1,167,875,000 of state sales tax revenue bonds (/AAA/AA+), the largest deal of the week.

During Tuesday’s retail order period, the yields were seen from 0.59% to 2.55% with 2% to 5% coupons. The bonds are due 2016 to 2025.

Morgan Stanley & Co. LLC, RBC Capital Markets LLC and Siebert Brandford Shank & Co. LLC are leading the syndicate.

Proceeds will refund outstanding state-supported debt.

Nashville-Davidson prices

Heading up Tuesday’s heavy slate, the Metropolitan Government of Nashville and Davidson County, Tenn., priced $347.46 million of series 2015C general obligation improvement bonds.

The bonds (Aa2/AA/) were sold competitively with Morgan Stanley winning the bid at a 3.175497% true interest cost.

The bonds are due 2017 to 2035 with 4% to 5.5% coupons and yields from 0.70% to 3.43%.

Proceeds will be used to finance long-term public works projects through the retirement of commercial paper bond anticipation notes.

“We are legally required to competitively bid G.O. issues,” said Richard Riebeling, director of finance for the government.

Port of Seattle sells bonds

Also during the day, the Port of Seattle offered up $585.88 million of series 2015 intermediate-lien revenue bonds. The deal was downsized from $592,605,000.

The deal included $73,185,000 of series 2015A non-AMT bonds, $285,445,000 of series 2015B non-AMT refunding bonds and $227.25 million of series 2015C AMT bonds

The 2015A bonds are due 2018 to 2035 with a term bond due in 2040. The serial coupons range from 3% to 5%. The 2040 bonds have a 5% coupon and priced at 109.603.

The 2015B bonds are due 2016 to 2035 with coupons from 2% to 5%.

The 2015C bonds are due 2016 to 2035 with a term bond due in 2040. The serial coupons range from 2% to 5%. The 2040 bonds have a 5% coupon and priced at 107.121.

The bonds (A1/A+/A+) were sold through Morgan Stanley and Barclays.

Proceeds will be used to refund all or a portion of the port’s series 2005A intermediate-lien revenue bonds.

Chattanooga powers offering

In other new-issue action, Chattanooga, Tenn., priced $260,835,000 of series 2015 electric system revenue bonds.

The deal includes $219,485,000 series 2015A refunding bonds, $15.36 million of series 2015B taxable bonds and $25.99 million of series 2015C revenue bonds.

The 2015A bonds are due 2017 to 2033 with 2.875% to 5% coupons. The 2015B bonds are due 2016 to 2025 with coupons from 0.70% to 3.735% and all priced at par. The 2015C bonds are due 2021 to 2035 with a term bond due in 2040. The serial coupons range from 4% to 5%. The 2040 bonds have a 5% coupon and priced at 113.963.

The bonds (/AA+/AA+) were sold through senior manager BofA Merrill Lynch.

Proceeds will be used to financial capital improvements to the city’s electric system and to refund the city’s series 2006A-B and 2008A electric system revenue bonds.

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