Municipal yields fall up to 3 bps; $8.3 billion of new issues ahead; NYC readies $750 million

By Sheri Kasprzak

New York, July 27 – Municipals were stronger on the day Monday amid light trading action, market sources said.

This trend of light trading has been prevalent this summer, with daily trading volume levels falling. Last week, the MSRB daily trading volume average was $8.8 billion, compared to $11.4 billion for the week of May 21 to May 30, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

“Tax-free yields, which trended higher in the early months of the year, stand about where they were when June began,” he noted Monday.

Even as trading volume declines this summer, new-issue volume remains very active, he noted, with this July shaping up to be the busiest since July 2008.

Michigan deal set

Heading up this week’s heavy supply, the State Building Authority of Michigan is on tap Thursday to price $990 million of series 2015-I facilities program revenue and revenue refunding bonds.

J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC lead the syndicate bringing the deal.

The bonds are due 2015 and 2019 to 2035 with term bonds due in 2040, 2045 and 2050.

Proceeds will be used to refund the authority’s series 2005, 2006 and 2008 revenue and refunding bonds.

NYC G.O. bonds to price

Also coming up on Thursday, the City of New York is prepared to bring $750 million of series 2016 general obligation bonds through Siebert Brandford Shank & Co. LLC.

The offering includes $650 million of series 2016A bonds and $100 million of series 2016B bonds, both of which are due 2016 to 2035.

The city plans to use the proceeds from the deal to redeem outstanding bonds.

Allegheny bonds ahead

Coming up on Wednesday, the Allegheny County Sanitary Authority of Pennsylvania is set to sell $266,285,000 of series 2015 sewer revenue bonds (A1).

Boenning & Scattergood Inc. is the bookrunner for those bonds, the proceeds of which will be used to refund a portion of the authority’s series 2005 revenue bonds and to pay a portion of its capital budget for the 2015-2016 fiscal year.

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