Municipals falter as Treasuries sink; Broward school board, Shelby County, Tenn., price deals

By Sheri Kasprzak

New York, Jan. 8 – Municipals lost ground on Thursday after a weeklong rally, market insiders said, as Treasuries sank on stronger stocks and stable oil prices.

Yields were reportedly higher by 3 basis points to 5 bps, outperforming Treasuries. The 10-year Treasury note and 30-year Treasury bond yields were each higher by 7 bps on the session.

Meanwhile, the last of the week’s supply priced, led by deals from the Broward County School Board of Florida and Tennessee’s Shelby County.

Broward prices COPs

Heading up Thursday’s pricing action was a $252.36 million offering from the Broward school board. The deal was cut from $273,135,000.

The certificates of participation (A1/A/) are due 2019 to 2030 with 5% coupons and yields from 1.33% to 2.88%.

Citigroup Global Markets Inc. was the senior manager for the deal, the proceeds of which will be used to refund the board’s series 2005A and 2006A COPs.

Shelby County sells G.O. bonds

Heading up Thursday’s competitive offerings, Shelby County, Tenn., came to market with $172,665,000 of series 2015A general obligation refunding bonds.

The bonds (Aa1/AA+/AA+) were sold competitively with Wells Fargo Bank, NA winning the bid at a 1.499970% true interest cost.

The bonds are due 2015 to 2027 with 2% to 5% coupons, said a pricing sheet.

“We chose to sell these refunding bonds on a competitive basis considering market conditions and other factors,” Mike Swift, the county’s director of administration and finance, said in an interview.

Swift said the county stands to achieve a $25 million present value savings through the refunding.

Proceeds will be used to refund outstanding G.O. bonds.

Oregon sells lottery bonds

Late Wednesday, the Oregon Department of Administrative Services released details on its six-tranche $438,495,000 of series 2015 Oregon State Lottery revenue bonds. The offering was upsized from $412.07 million.

The offering included $77,785,000 of series 2015A tax-exempt bonds, $38,995,000 of series 2015B taxable bonds, $117.58 million of series 2015C tax-exempt refunding bonds, $164.23 million of series 2015D tax-exempt refunding bonds, $22.71 million of series 2015E tax-exempt refunding bonds and $17,195,000 of series 2015F tax-exempt refunding bonds.

The 2015A bonds are due 2024 to 2035 with 5% coupons and 1.95% to 2.64% yields.

The 2015B bonds are due 2017 to 2024 with 0.95% to 2.78% coupons, which all priced at par.

The 2015C bonds are due 2016 to 2028 with coupons from 2% to 5% and yields from 0.25% to 2.27%.

The 2015D bonds are due 2020 to 2029 with 5% coupons and 1.36% to 2.33% yields.

The 2015E bonds are due 2021 to 2029 with 5% coupons and 1.52% to 2.33% yields.

The 2015F bonds are due 2023 to 2029 with 5% coupons and yields from 1.86% to 2.33%.

The bonds (Aa2/AAA/) were sold through senior managers Citigroup and Goldman, Sachs & Co.

Proceeds will be used to finance a variety of statewide capital projects and to refund the state’s series 2007C, 2008A, 2009A, 2009D, 2010A, 2011A and 2012A lottery revenue bonds.

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