Municipals edge higher as bulk of week’s deals price; MTA offers up $750 million bond deal

By Sheri Kasprzak

New York, Dec. 2 – Municipals closed Wednesday on a slightly stronger note, with yields on some triple-A rated bonds lower by 1 basis point, traders said.

Munis largely ignored a Treasuries market that was somewhat weaker in light of strong nonfarm payrolls numbers. The five-year Treasury note yield rose by 4 bps, and the two-year note yield rose by 3 bps.

Meanwhile, the lion’s share of the week’s heftier new-issue calendar priced, led by a large slate of transportation deals.

MTA brings bonds

The Metropolitan Transportation Authority of New York led the charge with $750 million of series 2015B transportation revenue bond anticipation notes sold competitively. The deal was upsized from $700 million.

The deal included $678 million of series 2015B-1 notes and $72 million of series 2015-B2 notes.

The 2015B-1 notes are due Aug. 1, 2016 with coupons from 0.25% to 5% with 0.22% to 1% yields.

The 2015B-2 notes were sold in six tranches: $12 million of series 2015B-2a notes due Aug. 1, 2016 with a 0.75% coupon priced at 100.095 to yield 0.75%; $12 million of series 2015B-2b notes due Oct. 1, 2016 with a 1% coupon priced at 100.305 to yield 0.62%; $12 million of series 2015B-2c notes due Feb. 1, 2017 with a 1% coupon priced at 100.282 to yield 0.75%; $12 million of series 2015B-2d notes due June 1, 2017 with a 1.125% coupon priced at 100.371 to yield 0.87%; $12 million of series 2015B-2e notes due Oct. 1, 2017 with a 1.25% coupon priced at 100.444 to yield 1%; and $12 million of series 2015B-2f notes due Feb. 1, 2018 with a 1.5% coupon priced at 100.836 to yield 1.10%.

Goldman Sachs & Co., PNC Capital Markets LLC, Citigroup Global Markets Inc., TD Securities (USA) LLC, BofA Merrill Lynch, Wells Fargo Bank, NA, J.P. Morgan Securities LLC, FTN Financial Capital Markets Inc. and Morgan Stanley & Co. LLC each won pieces of the series 2015B-1 notes at a weighted true interest cost of 0.33599%.

JPMorgan and PNC won the 2015B-2 notes.

Proceeds will be used to finance existing approved transit and commuter projects.

Kansas DOT offers deal

Elsewhere in the sector, the Kansas Department of Transportation hit the road with $400 million of series 2015B highway revenue bonds.

The bonds (Aa2/AAA/AA+) were sold through senior manager Morgan Stanley.

The bonds are due 2025 to 2035 with 5% coupons and 2.02% to 2.75% yields.

Proceeds will be used to finance highway projects within the state.

Pennsylvania Turnpike prices

In other significant transportation deals, the Pennsylvania Turnpike Commission drove a $304,005,000 issue of series 2015B turnpike revenue bonds.

The bonds (A1//A+) were sold through RBC Capital Markets LLC.

The bonds are due 2018 to 2036 with term bonds due in 2040 and 2045. The serial coupons range from 2.75% to 5% with 1.16% to 3.39% yields. The 2040 bonds have a 5% coupon and priced at 112.158 to yield 3.54%, and the 2045 bonds have a 5% coupon and priced at 111.625 to yield 3.60%.

Proceeds will be used to finance capital improvements to the turnpike.

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