Municipals end session weaker with Treasuries; Florida rail deal may receive tepid reception

By Sheri Kasprzak

New York, Nov. 9 – Municipals capped off Monday weaker, following a softer Treasuries market. This week, bifurcated by the Veterans Day holiday midweek, will feature just $5 billion of new issues.

The 10-year benchmark muni yield rose by 3 basis points to end the day at 2.19%, and the 30-year triple-A bond yield rose 3 bps to 3.20%, according to traders.

Meanwhile, the 10-year Treasury note yield rose by 2 bps to 2.36%, the 30-year bond yield rose by 2 bps to 3.12%, the five-year note yield rose by 2 bps to 1.75%, and the two-year yield fell by 1 bp to 0.89%.

Florida readies $1.75 billion

The week’s top offering comes from the Florida Development Finance Corp., which is expected to price $1.75 billion of series 2015A-B All-Aboard Florida Passenger Rail project surface transportation facilities revenue bonds Tuesday. The offering will finance a 235-mile commuter rail linking Miami with Orlando International Airport.

The bonds will be offered through BofA Merrill Lynch.

Rumors have swirled in the market that BofA has put off pricing the deal until the holiday-shortened week because investor interest has been tepid at best.

Some naysayers are concerned that the rail line will not attract enough riders to be profitable.

The deal was met with opposition from some Florida residents before it was even approved by the corporation. At a public hearing in Orlando back in August, some protestors expressed worry over traffic and public safety. The bond offering was unanimously approved Aug. 5.

The train will hit speeds of up to 125 mph and should be up and running in early 2017.

Springfield preps deal

Also ahead this week, the City of Springfield, Ill., is on tap to offer $495.59 million of senior lien electric revenue bonds on Thursday.

The bonds will be priced through Citigroup Global Markets Inc.

The bonds are due 2018 to 2035 with a term bond due in 2040.

Proceeds will refund the city’s series 2006, 2007 and 2008 electric revenue bonds.

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