Municipals rally as week’s last big deals price; Cypress-Fairbanks ISD sells $436.99 million

By Sheri Kasprzak

New York, Oct. 9 – Even after underperforming Treasuries earlier in the week, municipals made a comeback on Thursday with yields dropping by 3 basis points to 6 bps across the curve, traders said.

The long end of the curve was seen lower by about 6 bps, said a trader in the afternoon. Pushing the market was a recent crop of larger new deals. The week’s last remaining new deals priced Thursday.

Municipals outperformed range-bound Treasuries on the session. The 10-year benchmark Treasury note yield did climb during the day but fell to close at 2.34%, down a basis point over Wednesday’s close. The five-year note yield edged higher by about a basis point to 1.58%. The 30-year bond yield held steady at 3.07%.

Cypress-Fairbanks sells bonds

Heading up the last of the new offerings for the week was a $436.99 million sale of series 2014 unlimited tax school building and refunding bonds from the Cypress-Fairbanks Independent School District of Texas.

The bonds (Aa1/AA-/) were sold through senior manager J.P. Morgan Securities LLC.

The bonds are due 2016 to 2036 with term bonds due in 2039 and 2044. The serial coupons range from 1% to 5%. The 2039 bonds have a 5% coupon and priced at 116.033, and the 2044 bonds have a 5% coupon and priced at 115.248.

Proceeds will be used to finance the construction, improvement, repair and rehabilitation of schools within the district and to refund existing bonds.

University Hospital sees action

Amid secondary action, Ohio’s University Hospitals Health System series 2014A bonds were heavily traded, with 265 trades reported Thursday.

The yields on the 2.25% 2044 bonds were unchanged throughout the session. The notes priced at par.

The 4% 2044s were seen trading slightly higher. Yields were seen at around 4.065% at the market’s close Thursday after pricing Wednesday at 4.10%.

The bonds (A2/A/) were sold on a negotiated basis. Barclays and BofA Merrill Lynch were the lead managers for the 2014A bonds.

Grand River bonds trade

Also seen actively trading Thursday were the Grand River Dam Authority of Oklahoma’s revenue bonds.

The 3.6% 2039s were trading much higher on Thursday. The yield was reportedly around 3.45% at the close Thursday after pricing Wednesday at 3.70%.

Additionally, the 3.125% 2029s were trading Thursday afternoon at 3.013% after pricing at 3.16%.

The bonds (A1/A+/A) were offered through J.P. Morgan Securities LLC and Barclays.

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