Municipals end steady to stronger as market awaits $6 billion of new deals; MTA tops new issues

By Sheri Kasprzak

New York, June 13 – Municipals rounded out a quiet session on a stronger note, with yields either holding steady or falling, traders said.

The 10-year triple-A bond yield fell by 2 basis points to close at 2.42%. Longer maturities held steady, said a trader.

Meanwhile, Treasuries rallied as the likelihood of a June interest rate hike becomes less likely. The five-year note yield ended the session 3 bps lower at 1.14%, and the two-year yield held steady at 0.73%. The 30-year bond yield edged 1 bp lower to 2.43%, and the 10-year note yield fell by 2 bps to 1.62%.

MTA readies deal

Looking to the week’s supply, about $6 billion of new offerings are expected. The supply will be led by the Metropolitan Transportation Authority of New York’s $700 million of series 2016A dedicated tax fund bond anticipation notes. The deal is scheduled to price Tuesday.

The deal includes $350 million of series 2016A-1 notes and $350 million of series 2016A-2 notes.

The 2016A-1 notes are due March 1, 2017, and the 2016A-2 notes are due June 1, 2017.

The notes will be sold competitively, and proceeds will finance capital expenditures for the authority’s coming fiscal year.

Illinois plans G.O. bonds

Another significant competitive offering will come Tuesday from Illinois.

The state is in the market with $550 million of general obligation bonds.

First Southwest Co. is the financial adviser for the bonds, which are due 2017 to 2041.

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

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