Municipals end unchanged as bulk of new deals price; Texas A&M brings $334.36 million offering

By Sheri Kasprzak

New York, Sept. 4 - Municipal yields were largely unmoved during a particularly active session, even as Treasuries took a hit, market sources said.

The bulk of the week's new deals priced on Wednesday, which kept the market buoyed somewhat, particularly in the high-grade tax-exempt segment of the market. Munis have been susceptible to shifts in the Treasuries market, but solid demand for new deals may have saved the market from the drop in Treasuries, said a trader.

"Demand has been pretty good, and with low supply, there's no pressure," the trader said.

Texas A&M brings debt

Heading up the day's primary action, the largest deal of the holiday-shortened week priced. The Texas A&M University System came to market with $334,355,000 of series 2013 revenue financing system bonds.

The bonds (Aaa/AA+/AA+) were sold through lead manager Wells Fargo Securities LLC.

The deal included $239,965,000 of series 2013C taxable bonds and $94.39 million of series 2013D tax-exempt bonds.

The 2013C bonds are due 2014 to 2017 with term bonds due in 2033 and 2043. The serial coupons range from 0.38% to 1.78% and all priced at par. The 2033 bonds have a 4.772% coupon, and the 2043 bonds have a 4.972% coupon; both priced at par.

The 2013D bonds are due 2016 to 2028 with coupons from 1.875% to 5%.

Proceeds will be used to redesign Kyle Field football stadium and to fund capitalized interest.

Puerto Rico paper trades at 8%

Elsewhere, Puerto Rico paper was seen trading with an 8% handle after the Labor Day holiday, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

The price erosion, Schankel noted, is due mostly to small cuts as opposed to one event.

The commonwealth's financial woes are part of the problem, Schankel said, adding that this led to some fund liquidation over the past 14 weeks.

"Week's end saw apparent confirmation of Puerto Rico's stagnant economy with release of the Economic Activity Index for July, which indicated a 5% year-over-year decline in the monthly economic measure, the steepest monthly drop in three and a half years and the lowest index level in more than 10 years," Schankel said.

"On a more positive note, the [Puerto Rico] Treasury reported that tax revenues in July exceeded projects by about $43 million, or 9%. A good month does not a good year make, but given the magnitude of fiscal measures enacted by the new government in June, a strong start in the initial month in the new fiscal year is encouraging."

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