Municipal yields fall ahead of lighter supply; $6 billion of new issues on calendar for week

By Sheri Kasprzak

New York, June 12 – Municipal prices rose on the session Friday. Yields on top-rated munis fell by 1 to 2 basis points, staying in line with Treasuries, which got a boost from stalled negotiations between Greece and its European creditors.

Market insiders said about $6 billion of new deals will come to market in the week ahead, substantially less than the $9.5 billion that priced in the week just ended.

“Next week’s calendar is light at about $6 billion, likely reflecting the reduction in refunding activity, which drove strong volumes in the initial months of 2015,” said Alan Schankel, managing director with Janney Montgomery Scott LLC.

“Ten-year and 30-year benchmark rates stand 55 and 56 bps above mid-January levels.”

In other broad muni news, Lipper reported continued outflows for muni mutual funds. About $412 million of redemptions were seen for the week ended June 10, the second-worst week of the year so far.

Florida power deal set

Looking at the upcoming new-issue slate, the Florida Municipal Power Agency is on tap to price $277,745,000 of series 2015 all-requirement power supply revenue bonds through BofA Merrill Lynch and Wells Fargo Securities LLC.

The deal is on the calendar for Wednesday.

The offering includes $110.61 million of series 2015B bonds and $167,135,000 of series 2015C refunding bonds.

The agency plans to construct a coal-fired power plant in Taylor County, Fla., repay draws under a credit agreement and refund its series 2008A and 2009A revenue bonds with the proceeds.

Houston readies two

In the week ahead, Houston will offer two deals.

The first offering comes Wednesday in the competitive market, when the city will offer $220 million of tax and revenue anticipation notes through financial advisers First Southwest Co. and TKG & Associates LLC.

The notes mature June 30, 2016.

Proceeds will fund capital expenditures for the coming fiscal year.

The next day, the city will be in the market again, this time with a $150 million combined utility system revenue refunding bond deal in the negotiated arena. Citigroup Global Markets Inc. is the senior manager for this deal.

The city will refund its series 2005, 2006, 2006A, 2007A-B, 2008B and 2009A revenue bonds with the proceeds.

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