Municipals close unchanged to softer as new issues price; Orange County Sanitation brings debt

By Sheri Kasprzak

New York, July 8 – Municipals rounded out the session mostly flat to slightly weaker, despite some gains in the Treasuries market, as some of the week’s larger supply hit the market, insiders reported.

Short bonds were mostly flat with some slight weakness seen in the middle of the curve, said a trader in the afternoon.

“We seem to be ignoring Treasuries altogether,” the trader said.

“I think we’re still waiting for the bulk of new issues to price, so that’s where our focus is.”

Also impacting the market was continued pressure from Puerto Rico debt, which has struggled amid downgrades after legislation passed to allow public corporations to restructure debt and potentially default.

Orange County Sanitation prices

Heading up competitive offerings during the session, the Orange County Sanitation District of California sold $85.09 million of series 2014A wastewater refunding revenue bonds.

The bonds (/AAA/AAA) are due 2018 to 2027 with 5% coupons and 0.78% to 2.64% yields, said a pricing sheet.

Proceeds will be used to prepay and retire the district’s series 2007B certificates of participation.

Vineland deal prices

Also during the session, the City of Vineland, N.J., sold $80 million of series 2014 electric utility general obligation bonds.

The bonds (/AA-/) were sold competitively with William Blair & Co. winning the bid at a 3.742370% true interest cost.

The bonds are due 2015 to 2044 with 2% to 5% coupons and 0.27% to 4.10% yields, according to a pricing sheet.

Proceeds will be used to finance the improvement and upgrade of the city’s electric system.

Issuance to total $4 billion

These two issues are part of a slate of offerings that is expected to total $4 billion for the week.

During the very subdued week ahead of the July 4th holiday, just $2.5 billion of new offerings priced, compared with $7 billion to $9 billion calendars in recent weeks.

One of the larger deals of the week is scheduled to price Wednesday, along with the bulk of the week’s supply. The Massachusetts Port Authority is on tap to price $251.73 million of revenue bonds (Aa3/AA-/AA) in three tranches through Raymond James/Morgan Keegan.

The proceeds from that deal will be used to refund the authority’s series 2012A commercial paper notes and its series 2003A, 2003C and 2005A revenue bonds.

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