Municipal yields decline up to 6 bps as Treasuries rally; Tampa sells $88.95 million bonds

By Sheri Kasprzak

New York, July 7 – U.S. municipal bonds rallied again on Tuesday as Treasuries got a boost from continued strife in Greece, market insiders said.

It was a rather subdued session for municipals as Puerto Rico’s bonds calmed back down after debt service payments were made last week, and primary activity was relatively light.

Puerto Rico was in the news again on Tuesday as a judge in San Juan dismissed the commonwealth’s restructuring plan because it conflicts with U.S. bankruptcy laws. The island, which is trying to climb out of a $72 billion hole, is reportedly excluded from part of the bankruptcy code, and there’s some concern over whether the commonwealth can create its own bankruptcy protection rules for its public agencies.

Among the light Puerto Rico trading action, the 8% of 2035s were seen at 69.5 with a 12.073% yield to maturity. The bonds traded between 69.5 and 71.837 throughout the session, said traders late in the day.

“The bellwether 8% of 2035, which traded as low as 64 on June 30, had block trades at 71.5 in the morning [Monday] before drifting lower to close at 70.75,” said Alan Schankel, managing director with Janney Montgomery Scott LLC.

“PREPA 5% of 2037 had trades at an average price of 45.72 compared to a 43.86 average price on June 30.”

Tampa brings bonds

Heading up the day’s light pricing activity, the City of Tampa, Fla., brought to market $88,945,000 of series 2015 water and sewer system refunding revenue bonds.

The bonds (Aa1/AAA/AAA) were sold competitively.

The bonds are due 2015 to 2037 with 3% to 5% coupons and 0.15% to 3.632% yields, according to a pricing sheet.

Proceeds will be used to refund the city’s series 2005, 2006 and 2007 water and sewer system revenue bonds.

FSU offers debt

Elsewhere during the session, FSU Financial Assistance Inc. of Florida State University priced $84.5 million of series 2015 educational facilities improvement revenue bonds.

The deal included $63.53 million of series 2015A bonds, $9,005,000 of series 2015B taxable bonds and $11,965,000 of series 2015C bonds.

The 2015A bonds are due 2028 to 2035 with term bonds due in 2040 and 2045. The serial coupons range from 3.5% to 5%. The 2040 bonds have a 4.125% coupon priced at 96.571, and the 2045 bonds have a 4.25% coupon priced at 97.501.

The 2015B bonds are due 2017 to 2028 with 1.5% to 4.375% coupons, all priced at par.

The 2015C bonds are due 2017 to 2026 with 3% to 5% coupons.

The bonds (A1//A) were sold through BofA Merrill Lynch and J.P. Morgan Securities LLC.

Proceeds will be used to finance improvements at the south end zone of the university’s football stadium, including the construction of premium club seats and conference suites.

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