Munis improve as new issues continue to garner interest; New York Starc bonds trade actively

By Sheri Kasprzak

New York, Sept. 25 – Municipals remained strong on Thursday as the week’s larger offerings continued to attract investor interest, this time in secondary, traders reported.

Specifically, the $2.04 billion offering from New York’s Sales Tax Asset Receivable Corp. was seen trading very actively with yields dropping as much as 14 basis points in spots.

More broadly, muni yields were seen lower by 3 bps to 4 bps across the curve, said a trader in the afternoon.

Moving to demand, muni mutual fund inflows were $517 million for the week ended Sept. 17, according to the Investment Company Institute.

“In considering retail demand for tax-free debt using fund flows as a proxy, as meaningful as the $17.4 billion annual total is the steady persistent pace of new money we’ve seen this year with only two negative weeks in January and July,” wrote Alan Schankel, managing director with Janney Montgomery Scott LLC.

Starc prices $2.04 billion

Among the week’s largest deals, the Sales Tax Asset Receivable Corp. hit the market with $2,035,330,000 of series 2015A sales tax asset revenue bonds.

The bonds (Aa1/AAA/AA+) were sold on a negotiated basis through joint lead managers J.P. Morgan Securities LLC, Raymond James/Morgan Keegan, Goldman Sachs & Co. and Loop Capital Markets LLC. The co-lead manager was Ramirez & Co. Inc.

The bonds are due 2015 to 2033 with 3% to 5% coupons and yields from 0.11% to 3.44%, said a pricing sheet.

In secondary action Thursday, the 3% 2029s were seen trading between 2.798% and 3.1% after pricing Wednesday at 3.1%. The bonds ended the day at 3.02%.

Proceeds will be used to redeem existing debt.

Iatan bonds price

Elsewhere on Thursday, the Missouri Joint Municipal Electric Utility Commission offered up $155.73 million of series 2014A power project revenue refunding bonds for the Iatan 2 Project.

The bonds (A2//A) were sold through BMO Capital Markets LLC and Barclays.

The bonds are due 2017 to 2034 with 4% to 5% coupons and 0.59% to 3.38% yields, said a pricing sheet.

Proceeds will be used to refund the commission’s series 2006A and 2009A revenue bonds.

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