Municipals end week softer ahead of $6.5 billion of new deals; Rutgers University to price

By Sheri Kasprzak

New York, June 7 - Municipal yields were a touch off again on Friday as Treasuries also dipped, traders reported.

"We're pretty susceptible to shifts right now," a trader said in the early afternoon.

"Treasuries are off, and we're moving in kind with Treasuries. It's just more pressure on yields."

It was a difficult week for munis, as they underperformed Treasuries, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

"Tax-free markets are ending the week with underperformance relative to Treasury markets, pushing municipal-to-Treasury ratios to and above 100% for the first time in more than a month," said Schankel.

"On the week, for example, the 10-year MMD benchmark rose 2 basis points to 2.11% while the 10-year Treasury yield fell by 5 bps to 2.08% generating a 101.5% ratio."

The week ahead will provide a larger calendar of offerings. About $6.5 billion of new offerings are expected to hit the market.

Rutgers offering ahead

Leading those offerings, Rutgers University of New Jersey is expected to price $877,005,000 of series 2013 general obligation bonds (Aa3/AA-/AA-).

The deal will be conducted in three tranches: $339,315,000 of series 2013J tax-exempt G.O. refunding bonds, $137.97 million of series 2013K taxable G.O. refunding bonds and $399.72 million of series 2013L tax-exempt G.O. bonds.

Morgan Stanley & Co. LLC is the senior manager for the deal, the proceeds of which will be used to refund some of the university's certificates of participation, lease revenue bonds, revenue refunding bonds, general obligation bonds and commercial paper.

NYC Transitional deal set

Also coming up, the New York City Transitional Finance Authority plans to price $800 million of series 2013I future tax secured bonds in the coming week.

Loop Capital Markets LLC is the senior manager for that deal.

The bonds are due 2015 to 2039.

Proceeds will be used to finance general city capital expenditures.

Illinois will also be in the market during the week with a sizable offering. The state plans to sell $600,015,000 of series of June 2013 junior obligation sales tax Build Illinois Bonds (/AAA/AA+) through Barclays.

The bonds, which are due 2014 to 2026, will refund existing Build Illinois Bonds.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.