Municipals close somewhat firmer as new deals price; PANYNJ brings $400 million competitively

By Sheri Kasprzak

New York, June 17 – Municipals were somewhat firmer in spots during the session, despite a slide for Treasuries, as new issuance dominated activity Tuesday, market insiders reported.

Yields on long bonds were seen lower by 1 basis point to 2 bps with the middle and short portions of the curve seeing less movement, said a trader.

Even so, Treasuries took a pretty significant hit on the session after the Consumer Price Index reportedly climbed in May.

The 10-year Treasury note yield increased by 5.5 bps to end the day at 2.653%, and the five-year note yield rose 5 bps to 1.751%. The 30-year bond yield climbed by 4.5 bps to 3.442%.

The market has also experienced some volatility ahead of Wednesday’s Federal Reserve policy statement.

Port Authority bonds price

Heading up the new-issue action that dominated headlines Tuesday, the Port Authority of New York and New Jersey sold $400 million of series 183 consolidated bonds, said a pricing sheet.

The bonds (/AA-/AA-) were sold competitively. Morgan Stanley & Co. LLC won the bid at a 3.852336% true interest cost.

The bonds are due 2025 to 2042 with a term bond due in 2044. The serial coupons range from 3% to 5% with 2.73% to 3.96% yields. The 2044 bonds have a 4% coupon and priced at par.

Proceeds will be used to finance commuter projects.

“We are quite pleased with the depth of the responses received,” Port Authority chief financial officer Elizabeth McCarthy said in a statement released Tuesday.

Seattle sells debt

In other pricing action, the City of Seattle came to market with drainage and wastewater improvement and refunding revenue bonds, but the offering was downsized. The city priced $135.58 million of bonds, cut from $146,125,000.

The bonds (Aa1/AA+/) were sold competitively.

The bonds are due 2015 to 2039 with a term bond due in 2044. The serial coupons range from 3% to 5%, said a pricing sheet. The 2044 bonds have a 4% coupon and priced at par.

Proceeds will be used to finance drainage and wastewater projects and to refund existing debt.

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