Municipals boosted by stronger Treasuries; Hawaii hits market with $860.86 million G.O. bonds

By Sheri Kasprzak

New York, Nov. 7 - Municipals were improved on Thursday with high-grade yields falling by 1 basis point to 3 bps, market insiders reported.

The bulk of the week's new issues priced, alleviating some supply pressure, but better Treasuries were the driving force behind Thursday's improvement.

The 10-year Treasury note yield fell by 4 bps to close the session at 2.605%, and the 30-year bond yield shrank by 5.5 bps to 3.719%. The five-year note yield fell by 3 bps to 1.31%. Treasuries were largely moved on Thursday by the European Central Bank's decision to cut its key rate to 0.25% from 0.50% on low inflation.

Hawaii brings G.O. debt

Heading up the day's primary action, the State of Hawaii came to market with one of the largest offerings of the week, $860,855,000 of series 2013 general obligation bonds.

The offering included $635 million of series 2013EH G.O. bonds, $34,515,000 of series 2013EI G.O. refunding bonds, $58,355,000 of series 2013EJ G.O. refunding bonds, $27.33 million of series 2013EK G.O. refunding bonds, $50.86 million of series 2013EL G.O. refunding bonds, $25 million of series 2013EM taxable G.O. bonds and $29,795,000 of series 2013EN taxable qualified school construction bonds, said a pricing sheet.

The bonds (Aa2/AA/AA) were sold through senior managers BofA Merrill Lynch, Morgan Stanley & Co. LLC and RBC Capital Markets LLC.

Yields from 0.16% to 4.80%

The 2013EH bonds are due 2018 to 2033 with coupons from 4% to 5% and yields from 1.10% to 4.16%.

The 2013EI bonds are due Aug. 1, 2014, have a 5% coupon and priced at 103.357 to yield 0.16%.

The 2013EJ bonds are due in 2015 with a 3% coupon that priced at 104.455 to yield 0.36% and a 5% coupon that priced at 107.83 to yield 0.36%.

The 2013EK bonds are due in 2016 and have a 3% coupon that priced at 106.487 to yield 0.57% and a 5% coupon that priced at 111.827 to yield 0.57%.

The 2013EL bonds are due 2017 to 2023 with 1% to 5% coupons and 0.85% to 2.76% yields.

The 2013EM bonds are due 2018 to 2033 with coupons from 1.95% to 4.80% and all priced at par.

The 2013EN bonds are due 2018 to 2033 with coupons from 1.95% to 4.80% and all priced at par.

Proceeds will be used to finance certain capital expenditures for the state and to refund the state's series 2003DA G.O. bonds.

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