Municipals fall with Treasuries as jobless claims drop; Metropolitan Transportation sells debt

By Sheri Kasprzak

New York, June 18 – Municipal yields rose Thursday in tandem with Treasuries as strong employment data led some insiders to conclude an interest rate hike is coming soon, market sources said.

Yields on top-rated munis rose by as much as 2 basis points even as yields on Treasuries rose 2 bps to 5 bps.

Meanwhile, demand for new issues remained strong with the last remaining deals of the week pricing.

MTA sells bonds

Heading up those offerings, the Metropolitan Transportation Authority of New York sold $540 million of series 2015A transportation revenue bond anticipation notes. The deal was upsized from $500 million.

The deal included $20 million of series 2015A-1 notes, $20 million of series 2015A-2 notes and $500 million of series 2015A-3 notes, said a pricing sheet.

The 2015A-1 notes are due March 1, 2016, have a 0.50% coupon and priced at 100.16 to yield 0.21%. The 2015A-2 notes are due March 1, 2016, have a 1% coupon and priced at 100.449 to yield 0.19%. The 2015A-3 notes are due March 1, 2016, have a 0.50% coupon and priced at 100.205.

The notes were sold competitively, but the issuer did not immediately return calls for the winning bidder Thursday.

Proceeds will finance transportation projects.

Monroe brings debt

Elsewhere in the busy competitive calendar, Monroe County, N.Y., offered $95,865,000 of series 2015 public improvement bonds and bond anticipation notes.

The deal included $85.03 million of series 2015 bonds and $10,835,000 of series 2015 BANs, according to term sheets.

The bonds are due 2016 to 2035 with 3% to 5% coupons and 1% to 3.57% yields.

The BANs are due June 30, 2016, have a 1.5% coupon and priced to 100.794 to yield 0.70%.

The offering was conducted competitively. Citigroup Global Markets Inc. took the bonds at a 3.1570845% net interest cost. Jefferies & Co. won the BANs at a 0.7270% NIC.

Proceeds will be used to finance capital improvement projects and redeem outstanding BANs.

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