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Municipals decline with Treasuries; California sells $1.92 billion G.O. bonds; Guam deal prices
By Sheri Kasprzak
New York, Aug. 26 – Municipals sank on the day along with Treasuries as positive durable goods orders sent yields up, market sources said. Meanwhile, the week’s largest offering hit the market with California bringing $1.92 billion of general obligation bonds.
Yields on 30-year top-rated munis were higher by 6 basis points, said a trader in the afternoon. For comparison’s sake, the 30-year Treasury bond yield rose by 10 bps to 2.94%.
California tops calendar
Heading up the day’s new-issue slate, California sold $1,915,990,000 of series 2015 various purpose general obligation bonds.
The bonds (Aa3/AA-/A+) were sold through senior manager J.P. Morgan Securities LLC.
The deal included $1,365,990,000 of series 2015A bonds and $550 million of series 2015B bonds, according to a term sheet.
The 2015A bonds are due 2016 to 2035 with 2% to 5.25% coupons.
The 2015B bonds are due 2016 to 2024 with a term bond due in 2045. The serial coupons range from 2% to 5%. The 2045 bonds have a 4% coupon that priced at 100.402 and a 5% coupon that priced at 112.717.
Proceeds will be used to finance capital improvement projects and refund existing debt.
Guam brings bonds
Elsewhere during the session, the Government of Guam offered $410,485,000 of series 2015D business privilege tax bonds. The deal was upsized from $404,865,000.
The bonds (/A/A-) were sold through Barclays and Citigroup Global Markets Inc.
The bonds are due 2017 to 2035 with a term bond due in 2039. The serial coupons range from 3% to 5% with yields from 1.17% to 3.82%. The 2039 bonds have a 4% coupon that priced at 97.25 to yield 4.181% and a 5% coupon that priced at 109.09 to yield 3.91%.
Proceeds will be used to refund the government’s series 2007A and 2009A G.O. bonds.
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