Municipals continue downward slide as new issues price; Mid-Bay Bridge brings $228.32 million

By Sheri Kasprzak

New York, May 12 – Municipals were weaker again Tuesday, ignoring a turnaround in the Treasuries market, as supply continued to grow, market insiders said.

Yields on top-rated munis were higher by as much as 3 basis points, even as the 30-year and five-year Treasury note yields fell by 1 bp. The 10-year Treasury note yield was flat.

Despite a huge surge in new issue volume, with more than $11 billion on tap this week, trading volume has been light. Monday’s volume was about $7.8 billion, a market source said.

Elsewhere in the market, Puerto Rico announced that its general fund revenue for April came in at $97.4 million under projections, increasing the year-to-date shortfall to $251 million with two months left in the fiscal year.

Mid-Bay Bridge prices debt

Moving to new-issue action, the Mid-Bay Bridge Authority of Florida hit the market with $228,315,000 of series 2015 senior-lien revenue bonds, said a pricing sheet.

The bonds (/BBB+/BBB+) were sold through Goldman Sachs & Co.

The bonds are due 2021 to 2030 with term bonds due in 2035 and 2040. The serial bonds have 5% coupons. The 2035 bonds have a 5% coupon and priced at 107.51. The 2040 bonds have a 4% coupon that priced at 96.14 and a 5% coupon that priced at 106.297.

Proceeds will be used to provide cash for a reserve fund and to refund existing debt.

Deals upsized and downsized

Among the day’s other action, Illinois Finance Authority’s offering was upsized and Vermont Municipal Bond Bank’s offering was significantly downsized.

The Illinois Finance Authority offered $129,535,000 of series 2015 revenue bonds for Northwestern University, upsized from $120 million.

The bonds (Aaa/AAA/AAA) were sold through senior managers BofA Merrill Lynch and RBC Capital Markets LLC.

The bonds are due 2022 to 2028 with 3% to 5% coupons.

Proceeds will be used to finance capital expenditures on the university’s Evanston and Chicago campuses.

On the other side, the Vermont Municipal Bond Bank cut the size of its planned $94.43 million refunding deal to $30,615,000.

The bonds (Aa2/AA+/) were sold through Morgan Stanley & Co. LLC and Citigroup Global Markets Inc.

The bonds are due 2015 to 2027 with a term bond due in 2037. The serial coupons range from 1% to 5%. The 2037 bonds have a 3.75% coupon and priced at par.

Proceeds will be used to refund existing bonds.

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