Municipals end stronger; Metropolitan Transportation of New York sells $700 million of notes

By Sheri Kasprzak

New York, March 23 – Municipals improved on the session Wednesday along with Treasuries, traders said. Yields on top-rated municipals were lower by 2 basis points to 3 bps.

Treasuries, meanwhile, were boosted after the market settled down from interest rate hike talk earlier in the week. The 10-year Treasury note yield fell by 14 bps.

Primary activity wound down on Wednesday ahead of the early close on Thursday and complete closure on the Good Friday holiday.

MTA sells notes

The week’s largest deal came from the Metropolitan Transportation Authority of New York, which priced $700 million of series 2016A transportation revenue bond anticipation notes.

The deal included $50 million of series 2016A-1A notes, $10 million of series 2016A-1B notes, $25 million of series 2016A-1C notes, $25 million of series 2016A-1D notes, $50 million of series 2016A-1E notes, $340 million of series 2016A-1F notes, $10 million of series 2016A-2A notes, $50 million of series 2016A-2B notes, $120 million of series 2016A-2C notes, $10 million of series 2016A-2D notes and $10 million of series 2016A-2E notes.

The 2016A-1A notes have a 5% coupon and priced at 102.288, the 2016A-1B notes have a 3% coupon and priced at 101.284 to yield 0.44%, the 2016A-1C notes have a 2% coupon and priced at 100.752 to yield 0.50%, the 2016A-1D notes have a 1.5% coupon and priced at 100.526 to yield 0.45%, the 2016A-1E notes have a 2% coupon and priced at 100.782 to yield 0.44%, and the 2016A-1F notes have a 2% coupon and priced at 100.777 to yield 0.45%. They are all due Oct. 1, 2016.

The 2016A-2A notes have a 5% coupon and priced at 103.698, the 2016A-2B notes have a 2% coupon and priced at 101.181 to yield 0.58%, the 2016A-2C notes have a 2% coupon and priced at 101.189 to yield 0.57%, the 2016A-2D notes have a 2% coupon and priced at 101.173 to yield 0.59%, and the 2016A-2E notes have a 3% coupon and priced at 102.005 to yield 0.59%. They are all due Feb. 1, 2017.

The notes were sold competitively. The issuer did not return calls for the winning bidder Wednesday.

Proceeds will be used to finance transit and commuter projects.

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