Municipals weaken but outperform sinking Treasuries; Montclair State University bonds price

By Sheri Kasprzak

New York, March 4 - Municipals rounded out the session weaker but still managed to outperform significantly weaker Treasuries, market sources said.

Investors moved back toward riskier investments on Tuesday after flocking to safer investments Monday on unrest in Ukraine. By Tuesday, some moves had been made to ease tensions between Russia and Ukraine.

As a result, the 10-year Treasury note yield rose by 9 basis points to close at 2.699%, and the 30-year bond yield climbed by 9 bps to 3.649%. The five-year note yield rose by 7.5 bps to 1.536%.

Municipals, meanwhile, were just off slightly, mostly shrugging off Treasuries' performance even as pressure mounted somewhat as supply volumes increased.

"Demand is still pretty good, so it doesn't seem like this pressure is impacting us all that much," a trader said during the day.

"In fact, we've been in a supply slump for a while. It's actually a good thing."

Montclair deal prices

Heading up Tuesday's light primary activity, the New Jersey Educational Facilities Authority priced $190.14 million of series 2014A revenue bonds for the Montclair State University.

The bonds (A1//AA-) were sold through senior manager Barclays.

The bonds are due 2016 to 2034 with term bonds due in 2039 and 2044, said a pricing sheet. The serial coupons range from 3% to 5%. The 2039 bonds have a 5% coupon and priced at 107.287, and the 2044 bonds have a 5% coupon and priced at 106.512.

Proceeds will be used to fund the construction and renovation of some capital projects, improve existing technological infrastructure and refund existing debt.

SCPPA bonds ahead

Looking out on the horizon, the Southern California Public Power Authority announced its plans Tuesday to price $319.3 million of series 2014 Apex Power Project revenue bonds.

The deal includes $152.52 million of series 2014A tax-exempt bonds and $166.78 million of series 2014B taxable bonds, said a preliminary official statement.

The bonds (/AA-/AA-) will be sold on a negotiated basis with Goldman Sachs & Co. and Ramirez & Co. Inc. as the senior managers.

The 2014A bonds are due 2030 to 2038. The 2014B bonds are due 2015 to 2030.

Proceeds will be used to finance the acquisition of the Apex Power project and to make improvements and repairs to the project.

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