Municipals end mixed with Treasuries ahead of FOMC meeting; yields cut on New York TFA bonds

By Sheri Kasprzak

New York, March 15 – Municipals closed Tuesday on a mixed note, following in line with Treasuries, as the markets await the Federal Open Market Committee’s March meeting this week.

The 10-year triple-A muni bond ended Tuesday up 1 basis point at 1.93%, and the 30-year bond yield closed 1 bp lower at 2.91%.

Meanwhile, the 10-year note yield held steady at 1.97%, and the 30-year Treasury bond yield fell by 1 bp to 2.73%.

Yields adjusted downward

One of the week’s largest offerings, the New York City Transitional Finance Authority’s $750 million building aid bonds, saw yields downwardly adjusted, a market source said.

As previously reported, the bonds (Aa2/AA/AA) are due 2017 to 2037 with term bonds due in 2040, 2043 and 2045 with 2% to 5% coupons. Pricing finalized Monday after some downward adjustments, a trader noted.

Yields on New York’s Westchester County Local Development Corp.’s bonds for the Westchester Medical Center were also cut, the trader said.

“Demand for yield remains solid, with the 30-year maturity of the Westchester deal seeing a downward yield adjustment of 7 basis points to finalize as 5% coupon to yield 3.79% to the 10-year call, only 87 bps above the AAA benchmark yield,” the source said.

The Westchester corporation priced $283,775,000 of revenue bonds (Baa2/BBB/) Monday via Wells Fargo Securities LLC.

Looking ahead, the State of Hawaii was finalizing the terms of its combination negotiated and competitive offering $850.55 million of general obligation bonds Tuesday. The full details were not available.

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