Municipal yields rise again but outperform Treasuries; L.A. County offers $900 million notes

By Sheri Kasprzak

New York, June 2 – Municipal yields rose on the day Tuesday with yields rising by as much as 5 basis points in spots, said traders.

Despite the weakness, munis outperformed Treasuries, which saw yields rise by as much as 8 bps on the session. Yields on the 10-year Treasury note and 30-year bond rose 8 bps.

Meanwhile, the largest deals of the week hit the market to solid demand.

L.A. prices TRANs

Heading up the primary activity, Los Angeles County, Calif., priced $900 million of series 2015-2016 tax and revenue anticipation notes.

The notes were sold through senior managers BofA Merrill Lynch and Citigroup Global Markets Inc.

The notes are due June 30, 2016, have a 5% coupon and priced at 104.687, said a term sheet.

Proceeds will be used to finance county capital expenditures for the 2015-2016 fiscal year.

NYC upsizes G.O. bonds

Among the other large offerings priced during the day, the City of New York offered up $620,665,000 of series 2015F general obligation bonds. The deal was upsized from $600 million.

The offering included $315,665,000 of series 2015F-1 tax-exempt bonds, $105 million of series 2015F-2 taxable bonds and $200 million of series 2015F-3 taxable bonds, according to pricing sheets.

The 2015F-1 bonds are due 2016 to 2024 with 2% to 5% coupons.

The 2015F-2 bonds are due 2019 to 2024 with 1.80% to 3.20% coupons all priced at par.

The 2015F-3 bond are due 2026 to 2032 with 3.75% to 4.13% coupons.

The bonds were sold through senior manager J.P. Morgan Securities LLC with BofA Merrill Lynch, Citigroup Global Market Inc., Jefferies & Co., Morgan Stanley & Co. LLC and Siebert Brandford Shank & Co. LLC as the co-senior managers.

Proceeds will be used for capital purposes.

East Bay sells debt

The East Bay Municipal Utility District priced $185.05 million of series 2015 water system revenue bonds.

The deal included $74,335,000 of series 2015B green bonds and $110,715,000 of series 2015C bonds.

The 2015B bonds are due 2023 to 2038 with a term bond due in 2045. The serial coupons range from 4% to 5% with 1.97% to 3.65% yields. The 2045 bonds have a 4% coupon and priced at 101.229 to yield 3.85%.

The 2015C bonds are due 2024 to 2040 with a term bond due in 2045. The serial coupons range from 4% to 5% with yields from 2.11% to 3.75%. The 2045 bonds have a 4% coupon and priced at 101.229 to yield 3.85%.

The bonds (Aa1/AAA/AA+) were sold competitively.

Proceeds will be used to finance capital improvements to the district’s water system.

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