Municipals hold steady ahead of $8.2 billion new-issue calendar; MTA readies $500 million deal

By Sheri Kasprzak

New York, June 17 – Municipals were flat as the market awaited about $8.2 billion of supply, market insiders said.

The 10-year triple-A muni bond yield remained at 1.49% and the 30-year bond yield at 2.36%, a trader said Friday afternoon.

Inflows to municipal mutual funds continued the week ended June 15, said Lipper Inc., with $821 million of inflows reported.

Looking back at recent offerings, Illinois’ $550 million competitive general obligation bonds received record-low interest costs, but credit spreads were wider than previous deals, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

The state sold the G.O. bonds competitively with BofA Merrill Lynch winning the bid. The bonds are due 2017 to 2037 with a term bond due in 2041. The serial coupons range from 4% to 5%, and yields range from 1.32% to 4.05%. The 2041 bonds have a 4% coupon and priced at 98.25 to yield 4.113%.

The 10-year maturity priced 180 bps over the MMA benchmark, and the 20-year spread was 185 bps.

MTA readies deal

Looking to the week ahead, the Metropolitan Transportation Authority of New York is scheduled to price $500 million of series 2016B transportation revenue refunding bonds on Wednesday.

The bonds will be sold through joint bookrunners Morgan Stanley & Co. LLC and Siebert Brandford Shank & Co. LLC.

Proceeds will refund the authority’s series 2007A, 2008A and 2008B revenue bonds.

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