Municipals close mostly flat amid very light secondary, primary action; MTA sells $400 million

By Sheri Kasprzak

New York, Feb. 20 - Despite weaker Treasuries, municipals remained relatively flat on Thursday, with market sources citing light secondary activity and almost no supply pressure.

Treasuries closed the session weaker after mixed manufacturing data, but municipals held steady.

"There's no pressure to speak of, thanks to the light [new issue] calendar, and trading is light," a trader said at the end of the session.

"We're really holding flat. We're getting to that end-of-the-week stage when things are tapering off."

MTA brings debt

Heading up the day's primary activity, the Metropolitan Transportation Authority of New York sold $400 million of series 2014A transportation revenue bonds, said a pricing sheet.

The bonds were sold through joint bookrunners Morgan Stanley & Co. LLC, Lebenthal & Co. LLC and Siebert Brandford Shank & Co. LLC.

The offering included $268.55 million of series 2014A-1 bonds and $131.45 million of series 2014A-2 bonds.

The 2014A-1 bonds are due 2015 to 2034 with term bonds due in 2039 and 2044. The serial coupons range from 2% to 5.25%. The 2039 bonds have a 5.25% coupon and priced at 107.061, and the 2044 bonds have a 5% coupon and priced at 103.103.494.

The 2014A-2 bonds are due 2018 to 2028 with a term bond due in 2032. The serial coupons range from 4% to 5%. The 2032 bonds have a 5% coupon and priced at 106.897.

Proceeds will be used to finance commuter and transit projects.

Stockton USD bonds price

Elsewhere in primary action, the Stockton Unified School District of California came to market with $65 million of series 2014 general obligation bonds.

The bonds (/A+/) were sold through senior manager De La Rosa & Co.

The bonds are due 2014 to 2034 with term bonds due in 2038 and 2042, according to a pricing sheet. The serial coupons range from 3% to 5% with 0.25% to 4.58% yields. The 2038 bonds have a 5% coupon and priced at 102.856 to yield 4.65%. The 2042 bonds have a 4.5% coupon that priced at 95.669 to yield 4.78% and a 5% coupon that priced at 101.782 to yield 4.78%.

Proceeds will be used to finance capital improvement projects within the district.

The offering came on the heels of a Standard & Poor's upgrade to A+ from A, a move Alan Schankel, managing director with Janney Montgomery Scott LLC, called "unexpected."

S&P noted in it is report that the district's tax base partially overlaps the bankrupt City of Stockton's, but G.O. bonds from the school district are secured by property taxes levied and collected by San Joaquin County. The city's actions do not impact the district.

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