Munis end flat to firmer; billions of new deals hit market; U of California sells $1.17 billion

By Sheri Kasprzak

New York, March 11 – Municipals rounded out another busy day with yields flat to slightly lower, market insiders said, as billions in supply came to market.

The five-year and 10-year yields were unchanged on the day with the 30-year yield lower by about 1 basis point at 3.11%.

The market largely ignored Treasuries, which continued their weeklong rally with the 30-year yield falling 4 bps and the 10-year yield down by 3 bps.

U of California deal leads

Heading up the day’s pricing action, the University of California sold $1,170,210,000 of series 2015 general revenue bonds. The offering was upsized from $1.14 billion.

The offering included $788.52 million of series 2015AO bonds and $381.69 million of series 2015AP taxable bonds, the term sheet said.

The 2015AO bonds are due 2016 to 2035 with term bonds due in 2040 and 2042. The serial coupons range from 2% to 5%. The 2040 bonds have a 4% coupon that priced at 102.683 and a 5% coupon that priced at 114.916. The 2042 bonds have a 3.625% coupon and priced at 97.38.

The 2015AP bonds are due 2016 to 2027 with a term bond due in 2045. The serial coupons range from 0.54% to 3409% and all priced at par. The 2045 bonds have a 3.931% coupon and priced at par.

The bonds (Aa2/AA/AA) were sold through senior managers Barclays and Stifel, Nicolaus & Co.

Proceeds will be used to finance the construction, acquisition, improvement and renovation of university facilities at 10 campuses and to refund debt.

Tobacco Settlement bonds price

Another major offering came from the Tobacco Settlement Financing Corp. of Rhode Island, which sold $621,105,000 of series 2015 tobacco settlement asset-backed bonds.

The deal included $317.46 million of series 2015A tax-exempt bonds, $14,755,000 of series 2015A taxable bonds and $288.89 million of series 2015B bonds.

The 2015A tax-exempt bonds are due 2016 to 2030 with term bonds due in 2035 and 2040. The serial coupons range from 3% to 5% with 0.46% to 3.81% yields. The 2035 bonds have a 5% coupon and priced at 107.521 to yield 4.09%, and the 2040 bonds have a 5% coupon and priced at 105.386 to yield 4.34%.

The 2015A taxables are due 2015 to 2016 and have a 0.59% and a 0.80% coupon, respectively, both of which priced at par.

The 2015B bonds are due 2041, 2045 and 2050. The 2041 bonds have a 2.25% coupon and priced at par. The 2045 bonds have a 4.5% coupon and priced at 97.97 to yield 4.625%, and the 2050 bonds have a 5% coupon and priced at 101.591 to yield 4.80%.

The bonds were sold through Citigroup Global Markets Inc. and BofA Merrill Lynch.

Proceeds will be used to refund all of the corporation’s series 2002A bonds.

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