Municipals mostly weak; Connecticut prices; Pennsylvania to offer $1.2 billion G.O. bonds

By Cristal Cody

Tupelo, Miss., May 21 – Municipal bonds remained mostly weak on Thursday, according to market sources.

The benchmark 10-year muni bond yield firmed 1 basis point to 2.32%, while the 30-year bond yield widened 4 bps to 3.45%.

“A majority of the week’s primary market deals priced with mixed results,” RBC Capital Markets, LLC analysts said in a note on Thursday. “Primary market issuance continues to dominate the market, averaging just over $8.5 [billion] weekly. This year’s headwinds caused by near historic issuance continues pushing munis into weaker territory.”

Treasuries rallied over the day on weaker-than-expected economic data. The 10-year note yield dropped 6 bps to 2.19%.

The Labor Department reported that initial unemployment claims for the week ended May 16 climbed 10,000 to 274,00, while the National Association of Realtors said that existing home sales slipped 3.3% in April to a seasonally adjusted annual rate of 5.04 million units, well below the 0.8% forecasted increase.

Connecticut prices

In pricing action on Thursday, Connecticut sold $380.7 million of series 2015C-D general obligation bonds at par, according to a term sheet.

The deal included $200 million of series 2015C Sifma index bonds due 2017 to 2024 and $180.7 million of series 2015D Sifma index G.O. refunding bonds due 2016 to 2018 and in 2021 and 2022.

The bonds (Aa3/AA/AA) were sold on a negotiated basis with Loop Capital Markets LLC as the senior manager.

Proceeds will be used to finance capital projects and to refund the state’s series 2005 G.O. bonds.

Pennsylvania preps $1.2 billion

Coming up in next week’s primary action, Pennsylvania plans to price $1,237,230,000 of G.O. bonds, according to a preliminary official statement.

The deal includes $460 million of second series of 2015 bonds due 2016 through 2035 and $777.23 million of first refunding series of 2015 bonds due 2016 through 2026.

The bonds will be offered via a competitive sale on Wednesday.

Public Financial Management, Inc. is the financial adviser.

Proceeds will be used to provide funding for construction, acquisition and rehabilitation of capital facilities projects, capital highway and bridge projects, environmental maintenance and protection, open space and farmland preservation, watershed protection and to refund outstanding bonds.

Massachusetts Educational ahead

Also in the pipeline, the Massachusetts Educational Financing Authority intends to sell $184.8 million of series 2015A issue I education loan revenue bonds (/AA/A), according to a preliminary official statement.

Morgan Stanley & Co. LLC is the bookrunner for the negotiated offering.

Proceeds from the deal will be used to finance fixed-rate authority loans.

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