Municipals improve along with Treasuries as investors seek safety; Cache district details deal

By Sheri Kasprzak

New York, March 3 - Municipals followed Treasuries closely as instability in Ukraine dominated headlines and investors took a flight-to-quality stance, market insiders said.

Muni yields improved by 4 basis points to 5 bps across the curve, with shorter yields improving the most, traders said.

Meanwhile, Treasuries were boosted as Russia moved into the Crimean Peninsula. The 10-year Treasury note yield fell by 6 bps to close out the day at 2.601%, the five-year note yield fell by 5.5 bps to 1.458%, and the 30-year note yield fell by 4 bps to 3.554%.

Looking to the week's new issue calendar, about $5.3 billion of new deals are on tap.

Issuance in February came in at $14.7 billion, said Alan Schankel, managing director with Janney Montgomery Scott LLC. This is the lightest issuance of any February since 2000, Schankel noted.

Cache district details deal

In other news Monday, the Cache County School District of Utah released additional information on its $90 million of series 2014 general obligation school building bonds.

The bonds (Aaa/AAA/) were sold competitively. J.P. Morgan Securities LLC won the bid at a 3.380305% true interest cost, said Dale Hansen, business manager for the district Monday.

The bonds are due 2015 to 2016 and 2018 to 2034 with 2% to 5% coupons.

Proceeds will be used to finance the construction, improvement and equipment of school buildings and facilities within the district.

"The district is not required to sell its G.O. debt competitively but has always felt that better pricing on new money bonds is achieved by a competitive sale rather than a negotiated sale," Hansen said in an interview.

"We are extremely pleased with the bids that we received for this sale."

Texas transportation bonds set

The Texas Transportation Commission is set to price $1,191,990,000 of series 2014 state highway fund first-tier revenue bonds on Thursday.

The offering includes $891.99 million of series 2014A revenue and refunding bonds, which are due 2017 to 2024, 2031 and 2033 to 2034, and $300 million of series 2014B Sifma index floating rate bonds, which are due April 1, 2032.

Piper Jaffray & Co. and Citigroup Global Markets Inc. are the senior managers for the bonds (Aaa/AAA/).

Proceeds will be used to finance state highway projects and refund existing debt.

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