Municipals end weaker; Atlanta brings $252 million of G.O. bonds; L.A. prices $231.35 million

By Sheri Kasprzak

New York, June 10 – Municipals closed a busy session Wednesday on a weak note with yields rising by as much as 3 basis points, traders reported.

Weaker Treasuries pushed muni yields higher. Given strong fundamentals, munis were knocked down but still underperformed Treasuries, said a sellside source.

The 10-year Treasury note yield rose by 8 bps and the 30-year by 7 bps.

Atlanta sells debt

Meanwhile, it was another brisk session for the new-issue market, with the remainder of the week’s largest deals pricing.

Atlanta offered $252 million of series 2015 general obligation public improvement bonds.

The bonds (Aa2/AA/) were sold competitively with a consortium made up of BofA Merrill Lynch, Loop Capital Markets LLC and IFS Securities winning the bid, said city spokeswoman Jenna Garland. The true interest cost came in at 3.369681%.

The bonds are due 2017 to 2034 with 4.5% to 5% coupons and yields from 1% to 3.5%.

Proceeds will be used to finance improvements and repairs to city infrastructure.

“Under the leadership of Mayor [Kasim] Reed, the city’s credit rating has improved and is very strong,” Garland said in a statement released to Prospect News Wednesday.

“Recently, Moody’s and S&P affirmed our ratings, and Fitch resumed coverage in June of this year and raised our rating to AA+. As a result, the city is in an excellent position and secured an agreement favorable for the city and our residents.”

Miami-Dade brings bonds

Also during the session, Miami-Dade County, Fla., priced $536.84 million of series 2015 aviation revenue and revenue refunding bonds.

The deal included $498.34 million of series 2015A AMT revenue and refunding bonds and $38.5 million of series 2015B non-AMT revenue refunding bonds.

The 2015A bonds are due 2016 to 2033 with term bonds due in 2036, 2038 and 2045. The serial coupons range from 3% to 5% with yields from 0.63% to 4%. The 2036 bonds have a 4.25% coupon and priced at 98.073 to yield 4.39%, and the 2038 bonds have a 5% coupon and priced at 106.762 to yield 4.18%. The 2045 bonds have a 4.5% coupon and priced at 98.369 to yield 4.60%.

The 2015B bonds are due 2025 to 2027 with 5% coupons and yields from 2.91% to 3.25%.

Proceeds will be used to finance capital improvement projects for the Miami-Dade County Department of Aviation and to refund its series 2005A-B, 2007B, 2007D, 2008B and 2009B revenue bonds.

L.A. offers bonds

Another major metro area hit the market: Los Angeles sold $231,345,000 of series 2015 wastewater revenue bonds.

The deal included $100,835,000 of series 2015C green bonds (/AA+/AA+), $108.86 million of series 2015D refunding bonds (/AA+/AA+) and $21.65 million of series 2015A subordinate bonds (/AA/AA).

The 2015C bonds are due 2028 to 2035 with a term bond due in 2045. The serial bonds have 5% coupons and yields from 2.96% to 3.38%. The 2045 bonds have a 5% coupon and priced at 111.765 to yield 3.58%.

The 2015D bonds are due 2016 to 2034 with coupons from 2% to 5% and yields from 0.30% to 3.34%.

The 2015A bonds are due 2022 and 2024. The 2022 bonds have a 5% coupon and priced at 118.584 to yield 2.10%. The 2024 bonds have a 5% coupon and priced at 120.317 to yield 2.45%.

Proceeds will be used to refund the city’s series 2009A and 2010A wastewater revenue bonds, defease its series 2002A bonds and refund outstanding commercial paper notes.

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