Municipals weaken, outperform sinking Treasuries; Louisiana State leads university offerings

By Sheri Kasprzak

New York, April 22 – Municipals closed out another session on a sour note with yields rising by as much as 5 basis points, particularly on the long end of the curve, market insiders said. Despite the weakness, munis outperformed falling Treasuries Wednesday.

Over in the Treasuries market, the 30-year bond yield rose by 8 bps, and the 10-year note yield rose by 7 bps.

Supply remained brisk, led by a large number of university offerings.

LSU sells bonds

Heading up the university bonds Wednesday was a deal from the Louisiana State University and Agricultural and Mechanical College. The university sold $114.48 million of series 2015 auxiliary revenue and refunding bonds.

The bonds (A1//AA-) were sold through Raymond James/Morgan Keegan.

The bonds are due 2015 to 2035 with term bonds due in 2039 and 2045, said a term sheet. The serial coupons range from 2% to 5% with 0.25% to 3.68% yields. The 2039 bonds have a 5% coupon priced at 113.011 to yield 3.47%, and the 2045 bonds have a 5% coupon priced at 112.1 to yield 3.57%.

Proceeds will be used to finance the construction of a family residence hall and renovate existing residence halls and to refund the university’s series 2007 and 2008 revenue bonds.

Oregon State prices debt

Elsewhere in the sector, Oregon State University offered $50.28 million of series 2015 general revenue bonds.

The bonds (Aa3) were sold through senior managers Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC.

The deal included $40,205,000 of series 2015A bonds and $10,075,000 of series 2015B taxable bonds, according to pricing sheets.

The 2015A bonds are due April 1, 2045 and have a 5% coupon priced at 114.801 to yield 3.24%.

The 2015B bonds are due April 1, 2044 and have a 4.34% coupon priced at par.

Proceeds will be used to finance university capital projects.

U of Delaware prices bonds

Another higher-education offering came from the University of Delaware, which priced $50,115,000 of series 2015 revenue bonds.

The bonds (Aa1/AA+/) were sold through lead manager Morgan Stanley.

The bonds are due 2017 to 2035 with term bonds due in 2040 and 2045, according to a term sheet. The serial coupons range from 4% to 5%. The 2040 bonds have a 5% coupon priced at 115.292, and the 2045 bonds have a 5% coupon priced at 114.833.

Proceeds will be used to acquire, construct, equip and install facilities for the university.

Sacramento MUD bonds price

Among the larger deals Wednesday, the Sacramento Municipal Utility District Financing Authority of California hit the market with $193.36 million of series 2015 Cosumnes project revenue refunding bonds.

The bonds (/AA-/AA-) were sold through Citigroup Global Markets.

The bonds are due 2016 to 2030 with 2% to 5% coupons.

Proceeds will be used to refund the authority’s series 2006 Cosumnes project revenue bonds.

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