Municipals firm along with Treasuries; New Jersey Turnpike prices deal; Minnesota plans bonds

By Sheri Kasprzak

New York, Aug. 7 – Municipals rounded out the day on a positive note, following but underperforming Treasuries, insiders said. Yields fell by 3 basis points to 5 bps.

During the session, uncertainty in the foreign markets led investors to flock to safe havens, including Treasuries. Municipals followed suit, with short to intermediate maturities improving the most.

The 10-year Treasury note yield fell by 6 bps to end the day at 2.415%, its lowest level in more than a year. The 30-year bond yield fell by 5 bps to 3.225%, and the five-year note yield fell by 5 bps to 1.6%.

The boost in Treasuries was spurred by some unrest in Russia and Ukraine and the European Central Bank’s decision to hold its monetary policies steady.

Municipals trading activity was brisk during the morning but slowed in the afternoon, turning into a classic case of summer doldrums by the end of the session, said a trader.

“We’re losing momentum as the week winds down,” the trader said.

New Jersey Turnpike prices deal

Heading up the day’s primary activity, the New Jersey Turnpike Authority priced $202,025,000 of series 2014C turnpike revenue bonds.

The bonds (A3) were sold through Citigroup Global Markets Inc. and RBC Capital Markets LLC.

The bonds are due 2019 to 2025 with 5% coupons, according to a pricing sheet.

Proceeds will be used to refund the authority’s series 2005C revenue bonds.

Minnesota preps G.O. bonds

Moving to the coming week’s primary action, the State of Minnesota is ready to sell $903,845,000 of series 2014 general obligation bonds Tuesday, said a preliminary official statement.

The deal includes $438,055,000 of series 2014A various purpose G.O. bonds, $288 million of series 2014B state trunk highway G.O. bonds, $26.15 million of series 2014C taxable state various purpose G.O. bonds, $28.25 million of series 2014D state various purpose refunding G.O. bonds and $123.39 million of series 2014E state trunk highway G.O. refunding bonds.

The bonds will be sold competitively with Public Resources Advisory Group as the financial adviser.

The 2014A bonds and 2014B bonds are due 2015 to 2034, the 2014C bonds are due 2015 to 2033, the 2014D bonds are due 2015 to 2032, and the 2014E bonds are due 2015 to 2026.

Proceeds will be used to finance capital projects, including educational, parks, pollution control, transportation, natural resources and agricultural facilities; to fund improvements to the state’s trunk highway system and to refund G.O. debt.

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