Municipals hold steady ahead of sparse $6 billion supply; New York Transitional readies deal

By Sheri Kasprzak

New York, Sept. 21 – Municipals largely ignored a dip for Treasuries and held steady to close out Monday, market insiders said.

The triple-A MMA benchmark 10-year bond yield ended the day at 2.20% and the 30-year yield at 3.22%.

In the Treasuries market, Federal Reserve presidents from Atlanta, St. Louis and San Francisco all made comments to media Monday that suggest a rate hike could be coming before the end of the year. The comments sent the 30-year bond yield up 9 basis points and the 10-year yield up 7 bps.

NYC Transitional deal set

New-issue volume this week will remain relatively light at $6 billion, led by a $1 billion New York City Transitional Finance Authority offering.

The authority is on tap to price $1 billion of future tax secured subordinate bonds Tuesday after a two-day retail order period that wrapped up Monday.

The bonds (Aa1/AAA/AAA) will be sold through a syndicate led by Goldman Sachs & Co.

The offering includes $750 million of series 2016A-1 tax-exempt bonds due 2017 to 2039, $190 million of series 2016A-2 taxable bonds due 2017 to 2027 and $60 million of series 2016A-3 taxable bonds due 2017 to 2027.

The authority plans to use the proceeds to fund capital expenditures.

Massachusetts RANs ahead

Although the NYC offering is substantial, it’s not the largest deal of the week. Over in the competitive market Tuesday, the Commonwealth of Massachusetts is ready to bring $1.2 billion of general obligation revenue anticipation notes (MIG 1/SP-1+/F1+).

The deal includes $400 million of series 2015A notes due April 27, 2016, $400 million of series 2015B notes due May 25, 2016 and $400 million of series 2015C notes due June 22, 2016.

Proceeds will be used to finance capital expenditures.

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