Municipals rally with Treasuries as Greece rejects bailout; North Carolina deal tops slate

By Sheri Kasprzak

New York, July 6 – Municipal yields fell by as much as 6 basis points on Monday, traders said, rallying along with Treasuries as Greek voters rejected a bailout plan from the country’s European creditors. Investors flocked to safe havens as a result.

Yields on top-rated municipals were down by as much as 6 basis points, underperforming Treasuries. The 10-year benchmark Treasury note yield fell by 10 bps, and the 30-year bond yield fell by 8 bps.

The week will kick back off with a substantial but still-subdued new-issue calendar. About $7.1 billion of new offerings are on tap, a bit lighter from recent weeks but busier than last week’s holiday-shortened schedule.

North Carolina power deal set

Heading up the week’s primary action, the North Carolina Municipal Power Agency No. 1 is set to price $463.11 million of series 2015 Catawba Electric revenue bonds (/A/A) through negotiated sale.

Morgan Stanley & Co. LLC is the senior manager for the offering.

Proceeds will be used to refund the agency’s series 2008A, 2008C, 2009A, 2010A-B and 2012A-B Catawba Electric revenue bonds.

Illinois highway bonds ahead

Also around the bend, the Illinois State Toll Highway Authority is expected to hit the market Wednesday with $400 million of series 2015A toll highway senior revenue bonds (Aa3//AA-).

The bonds will be sold through BofA Merrill Lynch and William Blair & Co.

The bonds are due 2027 to 2040.

Proceeds will be used to fund capital projects as part of a 15-year capital program.

Miami-Dade preps TANs

Looking out on the horizon, the Miami-Dade County School District of Florida announced plans to price $305 million of tax anticipation notes (MIG1).

The notes, which are due Feb. 25, 2016, will be sold competitively on July 14.

Proceeds will finance capital expenditures ahead of the collection of ad valorem taxes.

The district recently came to market with a long-delayed $239.63 million offering of certificates of participation. The deal was substantially downsized from $460.74 million.

Those COPs (A1/A/) are due 2016 and 2023 to 2028 with 1% to 5% coupons and 0.65% to 3.45% yields, and proceeds from the offering will be used to refund the board’s series 2008B COPs.

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