Municipals weaken along with Treasuries; Houston ISD brings $349.74 million bond offering

By Sheri Kasprzak

New York, Sept. 4 – Municipals outperformed Treasuries but declined on the session, market insiders said, as the forward calendar for the week emptied.

Amid a Treasury sell-off, munis saw yields rise by 2 basis points to 3 bps. The 10-year Treasury note yield climbed by 4 bps and the 30-year rose 6 bps as the European Central Bank dropped its policy rate to a historic low of 0.05%.

Meanwhile, the Houston Independent School District sold the largest deal of the week, $349.74 million of series 2014A variable-rate limited tax schoolhouse bonds.

Houston ISD bonds price

The Houston bonds (Aaa/AAA/) were sold through senior managers Morgan Stanley & Co. LLC and Citigroup Global Markets Inc.

The bonds are due June 1, 2039, initially bear interest at 1% and priced at 100.47 to yield 0.35%, according to a term sheet.

Proceeds will be used to construct and equip school facilities within the district and to acquire new sites for such facilities.

Another Texas school district, the Del Valle Independent School District, sold $55.11 million of series 2014A unlimited tax refunding bonds. The deal was upsized from $53.33 million.

The bonds were sold through BOSC Inc.

The bonds are due 2015 and 2018 to 2032 with 2% to 5% coupons and yields from 0.20% to 3.29%, said a pricing sheet.

Proceeds will be used to refund the district’s series 2007 unlimited tax school building bonds.

Lane school district prices

In other school offerings, the Lane County School District No. 4J of Oregon brought to market $80 million of series 2014 general obligation bonds, said a pricing sheet.

The bonds (Aa2) were sold competitively. The issuer did not immediately return calls for the winning bidder Thursday.

The bonds are due 2015 to 2034 with 2% to 5% coupons and 0.16% to 3.26% yields.

Proceeds will be used to replace, renovate, improve, repair and remodel school facilities and other district property; address student safety and security in the district; replace textbooks and instructional materials; acquire technology for classroom instruction and improve technology infrastructure; acquire vehicles; and acquire equipment.

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