Municipals end with a firmer tone ahead of huge calendar; $16 billion of new supply ahead

By Sheri Kasprzak

New York, Dec. 1 – Municipals ignored Treasury weakness and found a firmer tone as investors await what promises to be one of the largest weeks for supply this year, market sources reported.

Although Treasuries sank, with the 30-year bond yield rising 6 basis points, yields on municipals were about 1 bp to 2 bps lower across the curve as supply picks up in a big way after the Thanksgiving holiday.

About $16 billion in new offerings are expected to come to market, including two deals that are well above $1 billion.

Texas Transportation eyed

Heading up the massive calendar of offerings for the week is a $1.4 billion offering from the Texas Transportation Commission. The commission is on deck to bring series 2014 general obligation mobility fund and refunding bonds (Aaa/AAA/AAA) through BofA Merrill Lynch and Wells Fargo Securities LLC.

The deal includes $1,225,000,000 of series 2014A bonds, which are due 2015 to 2036, and $175 million of series 2014B Sifma index bonds.

Proceeds from the sale will be used to construct, reconstruct, improve and expand state highways, as well as to refund outstanding parity debt.

New York bonds on tap

Another substantial offering ahead this week comes from the New York State Urban Development Corp., which is slated to price $1,310,325,000 of series 2014 state personal income tax revenue bonds (//AA+) on Tuesday.

That deal includes $938.58 million of series 2014A bonds, which are due 2016 to 2044, and $371,745,000 of series 2014B taxable bonds, which are due 2016 to 2024.

Those bonds will be sold competitively with Public Resources Advisory Group as the financial adviser.

Proceeds will finance highway and bridge, correctional system, housing, economic development and state facilities projects, as well as to refund the corporation’s series 2005A-1 economic development and housing, series 2007A economic development and housing, series 2005B state facilities, series 2005A economic development and housing, series 2006A economic development and housing, series 2007A economic development and housing, series 2005A transportation and series 2006A transportation state personal income tax bonds.

New York Water trades

Amid Monday’s light secondary action, the New York City Municipal Water Finance Authority’s series 2015CC bonds were seen trading.

The 4% 2045s ended trading on Monday at 3.625%. The bonds priced at a yield of 3.9%.

The 3.625% 2036s were seen at 3.424% Monday evening after pricing at a yield of 3.693%.

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