Municipals continue to improve as new issues hit market; New Mexico prices $302.07 million

By Sheri Kasprzak

New York, May 17 – Municipals rounded out a busy session on a stronger note, with the 30-year bond hitting a new low, market sources said.

The long high-grade muni bond fell by 2 basis points to end at 2.59%. The 10-year bond yield ended 1 bp lower at 1.61%.

Meanwhile, Treasuries were mostly softer on the session with the 10-year yield rising 1 bp and shorter notes rising as much as 3 bps.

New Mexico downsizes

Among Tuesday’s larger deals, the State of New Mexico hit the market with $302.07 million of series 2016 severance tax bonds. The deal was downsized from $332,785,000.

The offering included $78.75 million of series 2016A bonds, $181,395,000 of series 2016B refunding bonds and $41,925,000 of series 2016C taxable bonds

The 2016A bonds are due 2021 to 2026 with 5% coupons and yields from 1.14% to 1.80%.

The 2016B bonds are due 2019 to 2024 with 4% coupons and yields from 0.89% to 1.51%.

The 2016C bonds are due 2017 to 2021 with 2% coupons and yields from 0.89% to 1.60%.

The bonds were sold competitively with BofA Merrill Lynch winning the bid at a 1.381986% true interest cost.

Proceeds will be used to finance capital improvements and to refund the state’s series 2011A-1 and 2014A bonds.

L.A. bonds to price

Coming up on Wednesday, the Los Angeles Municipal Improvement Corp. is on tap to price $800.22 million of lease revenue bonds (/A+/A+) through Goldman Sachs & Co. and Siebert Brandford Shank & Co. LLC.

The offering includes $125.79 million of series 2016A capital equipment lease revenue refunding bonds and $674.43 million of series 2016B real property lease revenue refunding bonds.

Proceeds will be used to retire commercial paper notes and refund the corporation’s series 2008A lease revenue bonds.

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