Munis mostly flat; week’s issuance to total $6.5 billion; University of Chicago leads slate

By Sheri Kasprzak

New York, Aug. 4 – Municipals rounded out a quiet session mostly unchanged on Monday, unfazed by better Treasuries, market insiders said.

With about $6.5 billion of new offerings pricing this week, supply is a bit heavier than it has been in recent weeks.

“Yields aren’t moving by that much,” one trader said in the afternoon.

“I think a lot of folks are looking to the calendar this week. We seem to have quite a few interesting names. I think there still is a lot of interest in tobacco [settlement] bonds.”

In fact, one of the headlining deals this week comes from the Tobacco Settlement Financing Corp. of Rhode Island.

“We’ll see how this one goes,” the trader said.

Citi, BofA lead deal

The $593,655,000 Tobacco Settlement deal includes $336,065,000 of series 2014A bonds, which are due 2015 to 2029 with term bonds due in 2034 and 2039, and $257.59 million of series 2014B bonds due in 2039, 2044 and 2049.

The bonds (/A/BBB+) will be sold through senior managers Citigroup Global Markets and BofA Merrill Lynch.

Proceeds from the deal will be used to make a payment of no less than $20 million to the state, refund the corporation’s series 2002A bonds and fund the purchase at the open market purchase price of some maturities of the corporation’s series 2007 bonds.

U of Chicago bonds top deals

Heading up the new-issue slate are two offerings for the University of Chicago. During the week, the Illinois Finance Authority intends to sell $575 million of series 2014A revenue bonds (Aa2/AA/AA+) for the university, and the university itself will offer $175 million of series 2014B taxable fixed-rate bonds (Aa2/AA/AA+) on Wednesday.

The Illinois Finance bonds will be offered through Barclays and PNC Capital Markets, and the proceeds will go to construct, acquire, design and equip educational facilities for the university and to advance refund the university’s series 2008B revenue bonds.

On Wednesday, the university will price its bonds through Goldman Sachs & Co. and BofA Merrill Lynch.

Proceeds will be used for general corporate purposes.

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