Munis weaken along with Treasuries as Puerto Rico deal postponed; Portland sells sewer bonds

By Sheri Kasprzak

New York, Aug. 18 – Yields on top-rated municipals rose by as much as 2 basis points Tuesday, following but outperforming a weaker Treasuries market, insiders reported.

Treasuries took a hit Tuesday on positive housing data, sending yields up as much as 6 bps on the long end.

The big news of the day was the postponement of the Puerto Rico Aqueduct and Sewer Authority's $750 million revenue bond sale. The deal, poised to price Tuesday, will now come to market Thursday. Market sources suggested Tuesday that there's some concern over the timing of the deal. The offering was announced days after the commonwealth defaulted on debt for the first time in its history.

One source said Tuesday afternoon that the deal was delayed to give investors a bit more time to research the deal, especially in light of the fact that Fitch Ratings put the authority on watch for a possible downgrade.

Portland prices deal

Among the larger deals pricing Tuesday, the Portland, Ore., offered $393.105 million of series 2015 sewer revenue refunding bonds competitively.

The deal included $329.805 million of series 2015A first lien bonds and $63.3 million of series 2015B second-lien bonds.

The 2015A bonds are due 2016 to 2031 with 3% to 5% coupons and yields from 0.24% to 3.18%.

The 2015B bonds are also due 2016 to 2031 with 3% to 5% coupons and 0.24% to 3.18% yields.

Proceeds will refund outstanding sewer revenue bonds.

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