Municipals hold steady; New York's Utility Debt Securitization Authority prices $2 billion

By Sheri Kasprzak

New York, Dec. 12 - Municipals were mostly unchanged to somewhat firmer on Thursday, shrugging off losses in Treasuries.

The bulk of the week's new issues have priced, and new offerings in the coming week will be limited ahead of the Christmas holiday, market sources said.

"At this point, the only major loan on next week's slate is $525 million Massachusetts G.O.," said Alan Schankel, managing director with Janney Montgomery Scott LLC.

"Fund flows continue to be negative, with ICI reporting $1.3 billion in redemptions from municipal funds last week."

Despite the dwindling supply, demand has been strong enough for most new issues to reprice to lower yields, according to a market insider.

Utility Debt sells bonds

Heading up Thursday's primary action, the Utility Debt Securitization Authority of New York priced $1,999,644,000 of series 2013 restructuring bonds.

The deal included $1,517,925,000 of series 2013E tax-exempt bonds and $481,719,000 of series 2013T taxable restructuring bonds, according to a pricing sheet.

The 2013E bonds are due 2016 to 2035 with a term bond due in 2041. The bonds have 5% coupons. The term bond priced at 104.643.

The 2013T bonds are due 2021, 2022, 2023 and 2025. The 2021 bonds have a 2.042% coupon and priced at 99.999 to yield 2.04%. The 2022 bonds have a 2.554% coupon and priced at 99.995 to yield 2.552%. The 2023 bonds have a 2.937% coupon and priced at 99.997 to yield 2.937%. The 2025 bonds have a 3.435% coupon and priced at 99.994 to yield 3.432%.

The bonds were sold through Goldman Sachs & Co. and Morgan Stanley & Co. LLC.

Proceeds will be used to retire outstanding debt issued by the Long Island Power Authority.

New York Thruway bonds price

Another major offering of the session came from the New York State Thruway Authority, which priced $1.6 billion of series 2013A general revenue junior debt obligations.

The bonds (A3/A-/) were sold through lead managers Citigroup Global Markets Inc. and Loop Capital Markets LLC.

The bonds are due in 2019 with a 3% coupon priced at 104.029 to yield 2.20%, a 4% coupon priced at 109.066 to yield 2.20%, a 5% coupon priced at 115.199 to yield 2% and a 5% coupon priced at 114.104 to yield 2.20%, according to a pricing sheet.

Proceeds will be used to fund the construction of a New York bridge project.

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