Munis mixed; April volume pegged as robust; California State University prices $1.37 billion

By Cristal Cody

Eureka Springs, Ark., April 1 – Municipal bond yields ended mostly flat on the short end and 1 basis point to 2 bps better on the longer end of the curve on Friday.

Treasuries were mixed following a better-than-expected March employment report and strong manufacturing data.

The 10-year note yield closed unchanged at 1.75%, while the 30-year bond yield fell 1 bp to 2.58%.

The Labor Department said 215,000 jobs were added in March, better than the 205,000 forecasted.

New municipal bond deals that priced during the week traded better in the secondary market, RBC Capital Markets, LLC analysts said in a note on Friday.

“Houston ISD, which priced Tuesday, gained as much as 12 basis points,” the analysts said.

April deal volume is expected to be robust, according to the note.

“Borrowers are preparing to issue $10.2 [billion] over the next 30 days, an increase of over $4 [billion] as of April 1st,” the analysts said.

California University prices

In new pricing action, the trustees of the California State University sold $1,374,490,000 of systemwide revenue bonds (Aa2//), according to a term sheet.

The authority sold $1,124,490,000 of series 2016A bonds, $50 million of series 2016B-1 bonds, $100 million of series 2016B-2 bonds and $100 million of series 2016B-3 bonds.

The series 2016A bonds have serial maturities from 2017 through 2038 and term bonds due 2041 and 2045. The bonds priced with 2% to 5% coupons to yield 0.6% to 3.05%.

The 3% series 2016B-1 bonds due 2047 priced at 105.494 to yield 1.15%.

The 4% series 2016B-2 bonds are due 2049 and priced at 112.069 to yield 1.5%.

The 4% series 2016B-3 bonds due 2051 priced at 114.467 to yield 1.8%.

Barclays, BofA Merrill Lynch and Raymond James/Morgan Keegan were the bookrunners of the negotiated sale.

Proceeds will be used to finance and refinance the acquisition, construction, improvement and renovation of university facilities and to refund some outstanding revenue bonds.

Broward County school board brings COPs

The School Board of Broward County, Fla., tapped the market with a $216.94 million offering of certificates of participation (Aa3/A+/A+), according to an official statement.

The board sold $198,205,000 of series 2016A COPs due 2019 through 2033 with 5% to 3.25% coupons to yield 1.1% to 3.4%.

The $18,735,000 tranche of series 2016B COPs due 2025 through 2027 priced with 5% coupons to yield 2.31% to 2.61%.

J.P. Morgan Securities LLC was the lead manager of the negotiated offering.

Proceeds will be used to advance refund the board’s outstanding series 2008A certificates due July 1, 2019 through 2028 and 2033 and to prepay all of the outstanding series 2009A tax-exempt certificates.

Dartmouth College to price

Looking ahead, the trustees of Dartmouth College intend to price $250 million of 30-year taxable bonds, according to a preliminary offering memorandum.

The series 2016A bonds are due June 1, 2046.

Goldman Sachs & Co. and BofA Merrill Lynch are the bookrunners of the negotiated sale.

Proceeds will be used for general corporate purposes, including to finance or refinance capital improvements and to refund $100 million of the institution's $250 million outstanding series 2009A taxable bonds.

Los Angeles Water and Power preps deal

Also in the pipeline, the Department of Water and Power of the City of Los Angeles plans to price $550 million of water system revenue bonds, according to a preliminary official statement.

The series 2016A bonds (Aa2/AA+/AA) will be offered through a negotiated sale.

Wells Fargo Securities LLC and BofA Merrill Lynch are the bookrunners.

Proceeds will be used to pay for capital improvements to the water system, to prepay certain revolving loans payable from the water revenue fund and to purchase and cancel a portion of outstanding series 2006 A, subseries A-1 and subseries A-2 revenue bonds.

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