Municipals tumble as Treasuries fall on strong jobs data; Santee Cooper, S.C., arranges sale

By Sheri Kasprzak

New York, Feb. 6 – Municipals hit a snag again on Friday, falling as Treasuries slipped on positive jobs data, market insiders said.

Yields rose by 8 basis points to 10 bps, said a trader during the afternoon. The market was pulled down by a 257,000 January increase in nonfarm payrolls.

Looking to the coming week, supply will reach about $8.5 billion, slightly lower than the week just finished. Heading up the new-issue calendar is a $1.06 billion offering from the South Carolina Public Service Authority, or Santee Cooper.

Trading volume Thursday was reportedly $10 billion, down from Wednesday’s $13 billion pace but ahead of the $8 billion 30-day average, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

Demand remains strong with inflows reportedly at about $422 million this week.

Santee Cooper deal set

Moving back to that Santee Cooper offering, the authority is on tap to bring $1.06 billion of series 2015 revenue obligations on Wednesday through Barclays and BofA Merrill Lynch.

The offering includes $555 million of series 2015A tax-exempt refunding and improvement obligations, $65 million of series 2015B refunding obligations, $270 million of series 2015C refunding obligations and $170 million of series 2015D taxable obligations.

Proceeds from the deal will be used to refund the authority’s series 2005A-C refunding bonds, 2006A tax-exempt bonds, 2007A tax-exempt bonds and 2014A tax-exempt bonds.

Maryland DOT bonds ahead

Also coming up on Wednesday, the Maryland Department of Transportation is expected to price $300 million of series 2015 consolidated transportation bonds (Aa1/AAA/AA+).

The bonds will be sold competitively and are due 2018 to 2030.

Proceeds will be used to finance capital projects.

Pennsylvania bonds trade

Moving to the secondary market, Pennsylvania’s first series of 2015 general obligation bonds were trading lower on the session.

The 3% 2030s were seen at 3.116% Friday afternoon after pricing at 3.083% on Tuesday.

The 4% 2034s were trading at 2.961% after pricing at 3.31%.

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