Municipals sink in sympathy with Treasuries after equities rally; Pennsylvania leads offerings

By Sheri Kasprzak

New York, April 28 - Municipal prices sank across the board on Monday, moving in sympathy with Treasuries as equities rallied, market insiders said.

Yields on short bonds were seen about 2 basis points higher with intermediate bonds rising by a basis point. Long bond yields were up by 2 bps.

Meanwhile, Treasuries also rose as investors await first-quarter gross domestic product and the Federal Open Market Committee's rate decision later this week. The 30-year Treasury bond yield rose by 4.5 bps to close out Monday at 3.486%. The 10-year note yield rose by 3.5 bps to 2.702%, and the five-year note yield climbed by 2 bps to 1.748%.

Pennsylvania leads deals

Moving to primary action for the week, about $5.5 billion of new offerings will take the market back to the more typical calendar for the year, down substantially from the $8 billion that priced last week.

Topping new offerings is an $834.45 million competitive deal from the Commonwealth of Pennsylvania, which is in the market with general obligation bonds on Tuesday.

The deal includes $545 million of first series 2014 bonds due 2015 to 2034 and $289.45 million of first refunding series2014 bonds due 2015 to 2024.

Pennsylvania will use the proceeds to finance capital improvement projects throughout the state and to refund the state's series 2003, 2004, 2005, 2006 and 2007A-B G.O. bonds.

Ohio in the market

Also ahead during the week, the State of Ohio is expected to price $337,415,000 of series 2014 G.O. refunding bonds in three tranches on Wednesday.

The deal includes $161.78 million of series 2014A common schools G.O. refunding bonds, $116.01 million of series 2014B higher education G.O. refunding bonds and $59,625,000 of series 2014C infrastructure improvement G.O. refunding bonds.

The bonds (Aa1/AA+/AA+) will be offered competitively.

Proceeds will be used to refund the state's series 2006D and 2007A common schools G.O. bonds, its series 2006A-B higher education G.O. bonds and its 2005A, 2006A and 2007A infrastructure improvement G.O. bonds.

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