Municipal yields end somewhat weaker; New York City G.O. bonds finalize at higher yields

By Sheri Kasprzak

New York, July 25 - Municipal yields were seen off a touch on Thursday, but losses were light compared to earlier losses, market sources said.

"Yields are off a touch, there's a generally softer tone, but it's much better than the bloodletting earlier," a trader said in the early afternoon.

"Most new issues have already priced, so we're really looking at secondary. Treasuries were off, and we seem to be following in line."

New York City G.O.s price

Leading primary activity, the City of New York came to market Thursday with $500 million of fiscal series 2014A general obligation bonds, said a pricing sheet.

The bonds (Aa2/AA/AA) were sold on both a competitive and a negotiated basis. J.P. Morgan Securities LLC was the senior manager for the 2014A-1 bonds, which were sold on a negotiated basis. The issuer did not respond to requests for the winning bidder for the competitive sale Thursday.

The deal included $375 million of series 2014A-1 tax-exempt bonds and $125 million of series 2014A-2 taxable bonds.

The 2014A-1 bonds are due 2015 to 2039 with 2% to 5.25% coupons.

The 2014A-2 bonds are due 2015 to 2023 with coupons from 0.74% to 3.64%. They all priced at par.

"New York City finalized pricing on $508 million with higher yields compared to Monday's initial retail order period, reflecting market easing in early week trading," said Alan Schankel, managing director with Janney Montgomery Scott LLC.

"The 10-year maturity ended as 5% to yield 3.21%, compared to initial 3.17% pricing, while the yield of the long bonds, maturing in 2039, was adjusted upward by 11 bps, finalizing at 4.88%."

Proceeds will be used for capital purposes.

Philadelphia sells debt

Another major Northeastern city hit the market with G.O. bonds. The City of Philadelphia sold $208.36 million of series 2013A G.O. bonds, said a pricing sheet.

The bonds (A2/A-/A-) were sold through Citigroup Global Markets Inc. and Siebert Brandford Shank & Co. LLC.

The bonds are due 2014 to 2033 with 1% to 5.25% coupons and 0.2% to 5.23% yields.

Proceeds will be used to fund capital improvements and refund the city's series 2003A and 2008B G.O. bonds.

The offering was expected to include a $166,325,000 refunding portion, but a pricing date has not been set for that part of the deal. The refunding bonds are due 2014 to 2033 with a term bond due in 2038.

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