Municipals close weaker as new deals price; Chicago Midway Airport preps $348.32 million deal

By Sheri Kasprzak

New York, May 24 – Municipals rounded out a busier session on a weaker note, following in line with Treasuries, insiders said.

The 10-year triple-A bond yield rose by 1 basis point to 1.67% and the 30-year bond yield by 1 bp to 2.63%.

Treasuries took a hit on the day, pushed down by stronger stocks, market sources said. The 30-year Treasury bond yield and the 10-year Treasury note yield each rose by 2 bps.

Meanwhile, the week’s new-issue action got off to a start, with Connecticut reportedly pricing $500 million of general obligation bonds. The full terms of the bonds, which are due 2018 to 2025 with 2% to 5% coupons, were not immediately available.

Chicago airport deal set

Looking to Wednesday’s new offerings, the Chicago Midway Airport is on tap to price $348,315,000 of revenue and refunding bonds (/A/A).

Ahead of the offering, Fitch upgraded the airport’s second-lien bond rating to A from A-, noting the airport’s resilient and growing traffic base but cautioning about airline concentration as Southwest accounts for 90% of enplanements.

“Southwest executed a 15-year renewal of its agreement with the airport in 2012,” said Alan Schankel, managing director with Janney Montgomery Scott LLC.

“Enplanements have grown at a faster pace than those of both nearby O’Hare airport and the nation.”

Wednesday’s bonds will be offered through Barclays, and the proceeds will finance capital improvements to the airport and refund existing debt.

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