Muni yields climb as week’s remaining offerings price; Golden State yields adjusted downward

By Sheri Kasprzak

New York, March 26 – Municipal yields were higher on the session Thursday after holding steady for most of the week, market insiders said.

Yields rose by as much as 4 basis points on the short end of the curve with longer yields rising by about 1 bp, said a trader in the afternoon.

Munis outperformed weaker Treasuries, which were pressured by the timid reception to a seven-year note auction, with the 10-year benchmark Treasury yield climbing by 8 bps back to 2%.

Golden State adjusted down

Meanwhile, yields on Wednesday’s $1,689,540,000 bond offering from the Golden State Tobacco Securitization Corp. were downwardly adjusted.

The maximum yield in 2045, which had a 5% coupon at 3.38% with a 10-year call, kicked it to 4.19% to maturity, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

The bonds were flat at 3.38% in heavy trading action on Thursday. There were about 114 trades of the 2045s by market close Thursday.

Philadelphia school bonds price

Leading Thursday’s new issues was an offering from the School District of Philadelphia, which sold $233.46 million of series 2015 general obligation bonds.

The offering included $46.77 million of series 2015A bonds, $13,505,000 of series 2015B refunding bonds, $44,565,000 of series 2015C taxable bonds and $128.62 million of series 2015D refunding bonds, according to a pricing sheet.

The bonds (A1/A+/A+) were sold on a negotiated basis. PNC Capital Markets LLC was the senior manager for the 2015A and 2015C bonds. BofA Merrill Lynch was the lead manager for the 2015B and 2015D bonds.

The 2015A bonds are due 2016 to 2035 with 3% to 5% coupons and yields from 0.71% to 3.73%.

The 2015B bonds are due 2015 to 2016 with 4% to 5% coupons and 0.38% to 0.71% yields.

The 2015C bonds are due 2015 to 2025 with 1.55% to 4.038% coupons, which all priced at par.

The 2015D bonds are due 2016 to 2022 with 5% coupons and yields from 0.71% to 2.52%.

Proceeds will be used to finance school capital projects and to refund the district’s series 2005A-C G.O. bonds.

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