Municipals improve with Treasuries in another heavy primary day; Massachusetts debt prices

By Sheri Kasprzak

New York, Nov. 6 - Municipals were improved on Wednesday, following closely with better Treasuries, after struggling early in the session, traders reported.

Early in the day, municipals were reportedly mixed, said a trader during the afternoon.

A turnaround happened later in the day when Treasuries also improved. Muni yields were down 4 basis points to 5 bps with the most improvement seen in the shorter maturities, said a trader.

Shorter maturities of Treasuries were also most improved on Wednesday. The seven-year note yield was down 5.5 bps to close out the session at 2.015%, and the five-year note yield fell by 5 bps to 1.338%. The 10-year note yield fell by 3 bps to 2.644%, and the 30-year bond yield fell by half a basis point to 3.77%.

Massachusetts prices

Heading up the day's primary action, the Commonwealth of Massachusetts hit the market with $423.72 million of series 2013A commonwealth transportation fund revenue bonds.

The bonds (Aaa) were sold through BofA Merrill Lynch.

The bonds are due 2023 to 2038 with a term bond due in 2043, according to a pricing sheet. The serial coupons range from 3.5% to 5% with yields from 2.45% to 4.25%. The 2043 bonds have a 4.375% coupon that priced at 98.771 to yield 4.45% and a 5% coupon that priced at 105.591 to yield 4.13%.

Proceeds will be used to finance the construction and improvement of bridges in the commonwealth and to advance refund a portion of the commonwealth's series 2005A consolidated loan special obligation revenue bonds.

Yields lowered on N.J. deal

After the New Jersey Economic Development Authority priced $456,845,000 of series 2013 tax-exempt private activity bonds, the yields were bumped lower by as much as 12 bps, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

The bonds were sold through BofA Merrill Lynch and Barclays.

The bonds are due 2020 to 2028 with term bonds due in 2031, 2034, 2039, 2042, 2043 and 2052.

The serial coupons range from 5% to 5.5% with 3.20% to 5.00% yields.

The 2031 bonds have a 5% coupon and priced at 99.424 to yield 5.05%. The 2034 bonds have a 5.125% coupon and priced at 97.239 to yield 5.35%. The 2039 bonds have a 5.125% coupon and priced at 97.985 to yield 5.27%. The 2042 bonds have a 5.125% coupon and priced at 97.142 to yield 5.32%. The 2043 bonds have a 5.375% coupon and priced at 97.057 to yield 5.58%. The 2052 bonds have a 5.625% coupon and priced at 96.571 to yield 5.85%.

The offering received sufficient demand to allow repricing to yields as much as 12 bps below initial pricing, Schankel said.

"The AMT issue had a maximum yield of 5.85% in the 2052 maturity," he noted.

Proceeds will be used to finance improvements and replacements for the Goethals Bridge.

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