Municipal yields improve as investors seek bargains; Nebraska Investment brings $196 million

By Sheri Kasprzak

New York, Dec. 16 - Municipal yields were better by as much as 7 basis points to 8 bps out long on Thursday as Treasuries improved and investors did some bargain hunting on the long end of the muni curve, market insiders said.

One trader said that yields were lower throughout the curve, but most improved beyond 20 years.

"Treasuries are looking better, so that's helping, and a lot of investors are going for bargains on the long end," he said.

"Past 20 years, yields are better by 7 bps or 8 bps."

Elsewhere, he said, yields were down by 3 bps to 5 bps.

Moving to lighter primary action, the Nebraska Investment Finance Authority priced $196.425 million of its planned $675 million offering of single-family housing revenue bonds, said a pricing sheet.

Meanwhile, municipal mutual flows continued in the negative, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

"After a one week pause, mutual fund flows continued in the negative with $1.3 billion of existing tax-free funds in the week ending Dec. 8, for an average of $2.3 billion over four weeks," he noted.

"Based on anecdotal reports, we suspect the negative trend will continue through December."

Nebraska Investment prices

Nebraska Investment's series 2010A bonds were sold on a negotiated basis with J.P. Morgan Securities LLC as the senior manager.

The bonds are due 2011 to 2022, with term bonds due 2026, 2031, 2036, 2041 and 2045. The serial coupons range from 0.75% to 4.85%, all priced at par. The 2026 bonds have a 5.25% coupon, the 2031 bonds have a 5.7% coupon, the 2036 bonds have a 5.9% coupon, the 2041 bonds have a 6.05% coupon and the 2045 bonds have a 6.1% coupon, all priced at par.

The proposed deal also includes $347.855 million of series 2010B variable-rate bonds and $130.72 million of series 2010C variable-rate bonds, which will be priced at a later date.

Proceeds will be used to acquire securities and refund outstanding bonds.

Brookhaven notes, bonds

In the competitive market, the Town of Brookhaven, N.Y., sold $98,636,593 of bond anticipation notes and public improvement bonds, said a pricing sheet.

The deal included $80.056,593 of series 2010 bond anticipation notes and $18.58 million of series 2010A public improvement bonds (Aa2/AA+/).

TD Securities Inc. won the competitive bid.

The BANs are due Sept. 28, 2011 and have a 0.41% coupon priced at par and a 1.25% coupon to yield 0.42%.

The public improvement bonds are due 2012 to 2025 with term bonds due in 2027 and 2031. The serial coupons range from 1.25% to 5.8%. The 2027 bonds have a 6.125% coupon priced at 101.549 and the 2031 bonds have a 6.375% coupon priced at 101.704.

Proceeds will be used to fund improvement projects and acquire open space for parklands.

Utah Regents preps deal

Looking out on the horizon, the State Board of Regents of the State of Utah is expected to come to market with $389.45 million of series 2010EE student loan revenue bonds, said a preliminary official statement.

The offering includes $24.45 million of series 2010EE-1 fixed-rate tax-exempt AMT bonds and $365 million of series 2010EE-2 fixed-rate tax-exempt non-AMT bonds.

The bonds (Aaa/AAA/) will be sold on a negotiated basis with RBC Capital Markets Corp. and Bank of America Merrill Lynch as the underwriters.

The 2010EE-1 bonds are due 2011 to 2012 and the 2010EE-2 bonds are due 2013 to 2026 with a term bond due Nov. 1, 2030.

Proceeds will be used to make student loans to eligible Utah residents.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.