Municipals hold steady as market readies for $9 billion new issues; Dasny preps $1.17 billion

By Sheri Kasprzak

New York, July 20 – Municipals were flat Monday as the market awaited another heavy calendar of new deals, market sources said.

Yields on top-rated munis were flat even as Treasuries experienced some weakness as St. Louis Federal Reserve president James Bullard indicated a rate hike is more than 50% likely at the Fed’s September meeting.

Looking to this week, about $9 billion of new offerings are expected to price.

The heavy slate of deals will likely help boost a sluggish secondary market, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

“Muni market trading activity last week was relatively tame with moderate secondary activity, and we could see more of the same in the coming week as the summer doldrums continue, although a decent primary calendar may stimulate activity,” he said in a note Monday.

Dasny leads offering

Looking to the new issues, the Dormitory Authority of the State of New York tops the calendar with $1,167,875,000 of series 2015A state sales tax revenue bonds.

The bonds (/AAA/AA+) will be offered through Morgan Stanley & Co., LLC, RBC Capital Markets LLC and Siebert Brandford Shank & Co. LLC.

The bonds are due 2016 to 2025, and the proceeds will be used to refund outstanding state-supported debt.

Honolulu bonds ahead

Also coming up, Honolulu is slated to price a five-tranche deal on Wednesday.

The city will sell $689.12 million of wastewater system revenue bonds. The deal includes $176,165,000 of series 2015A first resolution bonds (Aa2//AA) due 2017 to 2045, $273.94 million of series 2015B refunding first resolution bonds (Aa2//AA) due 2017 to 2036, $99.91 million of series 2015C taxable refunding first resolution bonds (Aa2//AA) due 2016 to 2045, $114.59 million of series 2015A refunding second resolution bonds (Aa3//AA-) due 2017 to 2032 and $24,515,000 of series 2015B taxable refunding second resolution bonds (Aa3//AA-) due 2016 to 2032.

The bonds will be sold through BofA Merrill Lynch and Piper Jaffray & Co.

Proceeds will be used to finance additions and improvements to the wastewater system and to refund existing debt.

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