Municipals end little changed to firmer; Maryland’s $879.75 G.O. bonds lead week’s offerings

By Sheri Kasprzak

New York, July 21 – Municipals closed out Monday mostly unmoved with a firmer tone in spots amid lighter activity, market insiders reported.

Riding on Friday’s outperformance of Treasuries, tax-exempts retained that firmer tone, a trader said during the afternoon.

“There’s really not a lot going on,” the trader said.

“It feels like a typical Monday, but we do seem to be outperforming Treasuries again.”

In fact, munis didn’t seem to respond all that much to Treasuries during the day. The 30-year Treasury bond yield fell by 3 basis points to end at 3.264%, the five-year note yield rose by 1.5 bps to 1.68%, and the 10-year note yield fell by 1.5 bps to 2.471%.

On the demand side of the muni market, flows to muni mutual funds seem to be turning around, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC.

Outflows from funds were seen at $482 million for the week ended July 9, according to Investment Company data, but Lipper’s data for the week ended July 16 shows inflows of $158 million.

Maryland leads calendar

About $6 billion of issuance is expected to price this week. The State of Maryland will head up the new slate with an $879,745,000 offering of general obligation bonds. The offering is scheduled to price Wednesday through both negotiated and competitive sale.

The deal will be conducted in three tranches: $100 million of second series A tax-exempts through negotiated sale led by Citigroup Global Markets Inc., $400 million of second series B tax-exempts through competitive bid and $379,745,000 of second series C tax-exempts through competitive bid.

The bonds (Aaa/AAA/AAA) will be sold to acquire and construct state facilities and to make loans to local and state government entities for capital projects.

Harris County notes set

Looking to Tuesday’s offerings, Harris County, Texas, is scheduled to price $225 million of series 2014 tax anticipation notes through competitive sale.

The notes (/SP-1+/F1+) are due Feb. 27, 2015, and proceeds from the deal will be used to finance general cash flow needs for the 2015 fiscal year ahead of the collection of ad valorem taxes.

© 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.