Municipals weaken as bulk of deals price; South Carolina Public Service sells $1.1 billion

By Sheri Kasprzak

New York, Feb. 11 – Municipals were cheaper yet again on Wednesday as the majority of the week’s expected offerings came to market, market sources said.

The market largely followed Treasuries but continued to slide even as Treasuries reversed direction in the afternoon, said one trader.

Yields on municipals were higher by 1 basis point to 2 bps, whereas the 30-year and 10-year Treasury yields fell by 1 bp.

Santee Cooper taps market

Heading up the day’s primary activity, the week’s largest deal hit the market and upsized. The South Carolina Public Service Authority, also known as Santee Cooper, priced $1,107,820,000 of series 2015 revenue bonds, upsized from $1.06 billion.

The offering included $603.12 million of series 2015A tax-exempt refunding and improvement obligations, $64.87 million of series 2015B refunding obligations, $270.17 million of series 2015C refunding obligations and $169.66 million of series 2015D taxable obligations.

The 2015A bonds are due 2016 to 2038 with term bonds due in 2040, 2045, 2050 and 2055. The serial coupons range from 3% to 5%. The 2040 bonds have a 3.75% coupon priced at 97.254 and a 4% coupon priced at 101.285. The 2045 bonds have a 4% coupon priced at par and a 5% coupon priced at 126.126. The 2050 bonds have a 5% coupon priced at 109.313, and the 2055 bonds have a 5% coupon priced at 108.344.

The 2015B bonds are due 2022 to 2024 with 5% coupons.

The 2015C bonds are due 2016 to 2022 with 5% coupons.

The 2015D bonds are due Dec. 1, 2045 and have a 4.77% coupon priced at par.

The bonds (/AA-/) were sold through senior managers Barclays and BofA Merrill Lynch.

Proceeds will be used to refund the authority’s series 2005A-C refunding bonds, 2006A tax-exempt bonds, 2007A tax-exempt bonds, 2008A tax-exempt bonds and 2014A tax-exempt bonds.

Maryland DOT deal downsized

Looking to other action, the Maryland Department of Transportation came to market with $265,535,000 of series 2015 consolidated transportation bonds. The offering size was cut from $300 million.

The bonds (Aa1/AAA/AA+) were sold competitively.

The bonds are due 2018 to 2030 with 2.8% to 5% coupons and 0.68% to 2.87% yields.

Proceeds will be used to finance capital projects.

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