Municipals firm ahead of supply, Treasuries rally; King County, Wash., upsizes sewer offering

By Sheri Kasprzak

New York, Jan. 12 – Municipals were firmer to kick off an active week for supply, following in line with rallying Treasuries, traders reported.

Yields were lower by 3 basis points to 4 bps across the curve, better but underperforming Treasuries, which saw a 6 bps drop for the 10-year note yield and 30-year bond yield.

Meanwhile, about $7 billion in new issues are slated to come to market, led by a $750 million sale from the New York City Transitional Finance Authority. A retail order period for the deal was conducted Monday with a second one scheduled for Tuesday before the deal opens to institutions Wednesday.

Looking to demand, the largest weekly inflow to municipal funds since January 2013 was seen last week with $1.39 billion hitting funds, compared to $33 million the week before, according to the Investment Company Institute.

King County brings sewer debt

Leading Monday’s new issue action, King County, Wash., kicked off the busy week with $486.89 million of series 2015A sewer revenue refunding bonds. The offering was upsized from $416,235,000.

The bonds (/AA+/) are due 2016 to 2038 with term bonds due in 2040, 2045 and 2047, according to a pricing sheet. The serial coupons range from 3% to 5%. The 2040 bonds have a 3.5% coupon priced at 99.83 and a 5% coupon priced at 117.345. The 2045 bonds have a 4% coupon priced at 104.82, and the 2047 bonds have a 5% coupon priced at 116.322.

The bonds were sold through J.P. Morgan Securities LLC.

Proceeds will be used to refund the county’s series 2007, 2008 and 2009 sewer revenue bonds.

Rush University deal set

Also ahead this week, the Illinois Finance Authority is slated to price $501.91 million of series 2015 revenue bonds (//A+) for the Rush University Medical Center.

The bonds will be sold through Goldman Sachs & Co. and BofA Merrill Lynch.

Proceeds from the offering will be used to refund the medical center’s series 2006 and 2009A-D revenue bonds.

Orange Sanitation preps sale

Leading Tuesday’s competitive offerings, the Orange County Sanitation District of California is on tap to price $131 million of series 2015A wastewater refunding revenue obligations (/AAA/AAA).

The bonds are due 2028 to 2037.

Proceeds will be used to prepay and retire a portion of the district’s series 2007B COPs.

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