Municipals tumble as primary action kicks off; New Jersey Economic Development prices bonds

By Sheri Kasprzak

New York, Aug. 25 – Municipals dropped in sympathy with Treasuries, which got knocked down by a Chinese interest rate drop, market insiders said.

Muni yields rose by as much as 5 basis points on top-rated bonds.

Over in the Treasuries market, yields jumped as much as 11 bps as China lowered interest rates a day after Chinese stocks plummeted by 9%.

The 30-year bond yield jumped by 11 bps to close at 2.84%, the 10-year benchmark note yield rose by 11 bps to 2.12%, and the five-year note yield rose by 9 bps to 1.48%.

N.J. school bonds downsized

Heading up the day’s primary action, the New Jersey Economic Development Authority hit the market with $2,164,333,000 of series 2015 school facilities bonds. The deal was downsized from $2.22 billion.

The deal included $491.74 million of series 2015WW school facilities construction bonds, $1,249,750,000 of series 2015XX refunding bonds, $379,355,000 of series 2015YY taxable refunding bonds and $43,485,000 of series 2015ZZ bonds.

The 2015WW bonds are due 2028 to 2037 with a term bond due in 2040. The serial coupons range from 4.625% to 5.25%. The 2040 bonds have a 5.25% coupon and priced at 101.136.

The 2015XX bonds are due 2019 to 2027 with 3.25% to 5% coupons.

The 2015YY bonds are due 2017 to 2020 with 3.375% to 4.447% coupons and all priced at par.

The 2015ZZ bonds are due June 15, 2018, have a 3.802% coupon and priced at par.

The bonds (/A-/A-) were sold through BofA Merrill Lynch.

Proceeds will be used to finance school construction projects and refund outstanding school debt.

Cobb brings Braves bonds

Another major offering for the day came from the Cobb-Marietta Coliseum and Exhibit Hall Authority of Georgia, which sold $376.6 million of series 2015 taxable revenue bonds for the Cobb County Coliseum, a new stadium for the Atlanta Braves.

The bonds are due 2017 to 2030 with a term bond due in 2047. The serial coupons range from 1% to 3.85%. The 2047 bonds have a 4.5% coupon and priced at par.

Proceeds will finance the construction of the Cobb County Coliseum, a baseball stadium for the Atlanta Braves.

The bonds were sold competitively.

The offering hit a bit of controversy back in July when a small group of residents went to court to block the financing. Thirteen residents of the county argued that the stadium was not a public facility and wasn’t intended to be. A Cobb County Superior Court judge, however, ruled the financing could proceed.

California talked at 3.35%

Moving to Wednesday’s offerings, the day’s primary activity will be led by a $1.85 billion general obligation deal from the State of California.

The deal will be offered through J.P. Morgan Securities LLC, and proceeds will finance capital expenditures.

On Tuesday, pricing on the 30-year maturity was talked at 3.35%.

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