Municipals sink along with Treasuries; muni mutual funds add $1.1 billion of inflows for week

By Sheri Kasprzak

New York, Dec. 18 – Municipal prices tumbled along with Treasuries following sinking manufacturing data out of Philadelphia, market insiders said.

Yields were seen higher by 4 basis points to 5 bps, weak but outperforming Treasuries. The 10-year Treasury benchmark yield rose by 8 bps, and the 30-year bond yield also climbed by 8 bps.

Municipal mutual funds rose by $1.1 billion for the week, marking the 22nd straight week of inflows, said Tom Kozlik, municipal credit analyst with Janney Montgomery Scott LLC.

“This is particularly noteworthy since taxable bond fund flows have turned negative in December, with $0.4 billion in outflows last week,” he said.

NYC housing bonds price

Amid the last few offerings of the year, the New York City Housing Development Corp. hit the market with $235 million of series 2014A multifamily rental housing revenue bonds.

The bonds (Aaa) were sold through Morgan Stanley & Co. LLC.

The deal included $230 million of series 2014A-1 non-AMT bonds and $5 million of series 2014A-2 taxable bonds, according to a pricing sheet.

The 2014A-1 bonds are due 2016 to 2025 with term bonds due in 2029, 2034, 2039 and 2044. The serial coupons range from 0.55% to 2.9%, all priced at par. The 2029 bonds have a 3.375% coupon, the 2034 bonds have a 3.7% coupon, the 2039 bonds have a 3.8% coupon and the 2044 bonds have a 3.95% coupon, all priced at par.

The 2014A-2 bonds are due 2015 to 2016 with 0.3% to 1.07% coupons, all priced at par.

Proceeds will be used to finance improvements to a multifamily rental unit at 8 Spruce Street in Manhattan.

Dasny brings Pratt bonds

Also out of the Empire State, the Dormitory Authority of the State of New York offered up $73.67 million of series 2015A revenue bonds for the Pratt Institute.

The bonds (A3) were sold through Janney Montgomery Scott.

The bonds are due 2015 to 2029 with term bonds due in 2034, 2036, 2039 and 2044, according to a term sheet. The serial coupons range from 3% to 5% with 0.39% to 3.09% yields. The 2034 bonds have a 5% coupon priced at 114.534 to yield 3.21%, and the 2036 bonds have a 3.625% coupon at 98.166 to yield 3.75%. The 2039 bonds have a 5% coupon priced at 113.05 to yield 3.38%, and the 2044 bonds have a 5% coupon priced at 112.273 to yield 3.47%.

Proceeds will be used to finance the construction of student residential facilities at the institute’s Brooklyn campus, as well as to refund the institute’s series 1999 bonds.

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