Municipal yields fall 1-2 bps as market awaits subdued supply; NYC Transitional plans deal

By Sheri Kasprzak

New York, June 15 – Municipals closed firmer on the day as Treasuries climbed and the market awaits a substantially subdued new-issue calendar, said traders.

Yields on top-rated municipals were lower by 1 basis point to 2 bps. Meanwhile, Treasuries saw yields fall by 1 bp to 4 bps across the curve as the market waits for Wednesday’s Federal Open Market Committee meeting. Some market insiders have suggested that Wednesday’s meeting might be the right moment for the Fed to pull the trigger and increase the Federal Fund rate.

In the week ahead for municipals, new-issue volume is expected to fall to just over $6.7 billion, sellside sources said.

New York City TFA deal set

Heading up the week’s new-issue calendar, the New York City Transitional Finance Authority is slated to price $750 million of building aid revenue bonds (Aa2/AA/AA).

The bonds, which are due 2016 to 2044, will be offered through Goldman Sachs & Co. and Ramirez & Co. Inc.

Proceeds will be used to finance capital projects as part of the authority’s five-year plan.

The authority sold $750 million of building aid revenue bonds in January with maturities from 2016 to 2044 with 3% to 5% coupons and 0.24% to 3.25% yields.

Florida power bonds ahead

In other upcoming deals, the Florida Municipal Power Agency is slated to price $277,745,000 of series 2015 all-requirement power supply revenue bonds in two tranches.

The deal includes $110.61 million of series 2015B bonds and $167,135,000 of series 2015C refunding bonds.

The bonds will be sold through BofA Merrill Lynch and Wells Fargo Securities LLC.

Proceeds will be used to construct a coal-fired power plant in Taylor County, Fla., as well as to repay draws under a credit agreement and to refund the agency’s series 2008A and 2009A revenue bonds.

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