Munis finish busy session flat to stronger; California Infrastructure brings clean water bonds

By Sheri Kasprzak

New York, April 13 – Municipals rounded out Wednesday on a mixed note with short bonds holding steady and longer maturities strengthening, said traders.

The 10-year triple-A bond yield rose by 2 basis points to 1.72% and the 30-year by 1 bp to 2.69%.

Meanwhile, municipal-to-Treasury ratios slipped to 96% for 10-year bonds and 103% for 30-year bonds, a market insider said Wednesday morning.

California bonds price

Among the substantial new-issue activity, the California Infrastructure and Economic Development Bank hit the market with one of California’s larger deals. The state, which has been largely absent from the market, has a flood of new offerings coming up.

This time, the development bank priced $414.21 million of clean water state revolving fund revenue bonds via Morgan Stanley & Co. LLC, Piper Jaffray & Co. and Stifel, Nicolaus & Co. Inc.

The bonds are due 2017 to 2035 with 2% to 5% coupons and yields from 0.55% to 2.26%.

Proceeds will be used to fund various water projects across the state.

Ohio brings highway bonds

In other news, the State of Ohio sold $228 million of series S general obligation highway capital improvement bonds.

The bonds (Aa1/AAA/AA+) were sold through Loop Capital Markets LLC.

The bonds are due 2017 to 2031 with 1.25% to 5% coupons and 0.59% to 2.13% yields.

Proceeds will be used to finance highway capital improvements.

Las Vegas sells debt

Elsewhere, the City of Las Vegas sold $148,835,000 of series 2016 G.O. bonds, upsized from $138.3 million.

The deal included $90.1 million of series 2016A performing arts center G.O. refunding bonds, $42.59 million of series 2016B various purpose G.O. refunding bonds and $16,145,000 of series 2016C sewer refunding G.O. bonds.

The 2016A bonds are due 2020 to 2039 with 3% to 5% coupons and yields from 1.03% to 3.30%. The 2016B bonds are due 2017 to 2036 with 3% to 5% coupons and 0.73% to 3.101% yields. The 2016C bonds are due 2017 to 2021 with 4% coupons and yields from 0.73% to 1.22%.

The bonds (Aa2/AA/) were sold competitively. Morgan Stanley won the bid for the 2016A bonds at a 2.8784% true interest cost. BofA Merrill Lynch took the 2016B bonds at a 2.7287% TIC, and Citigroup Global Markets Inc. won the 2016C bonds at a 1.0733% TIC.

Proceeds will be used to refund the city’s series 2009 performing arts center bonds, its series 2006B various purpose refunding G.O. bonds and its series 2006A sewer G.O. bonds.

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