Municipals mixed ahead of $8.4 billion supply; Texas Transportation preps $1.75 billion bonds

By Sheri Kasprzak

New York, Jan. 16 – The municipals market closed out the week ahead of the holiday mixed with the short end seeing some improvement and the long end weakening in sympathy with Treasuries, market sources said.

Yields on the short end were seen lower by 2 basis points to 3 bps, but long bonds were higher by 1 bp to 2 bps.

Meanwhile, Treasuries weakened on strong year-over-year Consumer Price Index data with the 30-year bond yield rising 4 bps and the 10-year note yield up 6 bps.

Looking to upcoming supply, new issues are expected to total about $8.4 billion in the week ahead even with the Martin Luther King Jr. holiday halting action on Monday.

Texas Transportation deal set

Heading up the new supply, the Texas Transportation Commission is on deck to price $1.75 billion of series 2015 Central Texas Turnpike System revenue bonds.

The deal includes $225 million of series 2015A first-tier bonds (A3/A-/A-), $225 million of series 2015B first-tier refunding bonds (A3/A-/A-) and $1.3 billion of series 2015C second-tier refunding bonds (Baa1/BBB+/BBB).

The bonds will be sold through lead managers Barclays and J.P. Morgan Securities LLC.

Proceeds will be used to refund the commission’s series 2002A and 2012A-B revenue bonds.

Washington preps $1 billion

Another $1 billion-plus offering comes from the State of Washington, which is set to sell $1,001,305,000 of series 2015 general obligation bonds on Wednesday.

The bonds (Aa1/AA+/AA+) will be sold competitively.

The offering includes $282,275,000 of series 2015B bonds, $200.63 million of series 2015C various purpose G.O. bonds, $58,205,000 of series 2015T-2 taxable bonds and $460,195,000 of series R-2015E various purpose G.O. refunding bonds.

Proceeds will be used to finance state capital projects and refund existing G.O. debt.

Louisiana to sell

Another state bond deal is also set for the week. The State of Louisiana is scheduled to sell $459.64 million of series 2015 gasoline and fuels tax revenue refunding bonds.

The bonds will be sold through Citigroup Global Markets Inc.

Proceeds will refund existing bonds.

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