Municipals improve along with Treasuries; Washington Suburban Sanitary District, Md., prices

By Sheri Kasprzak

New York, April 15 - Municipals ended Tuesday firmer in sympathy with Treasuries as unrest escalated in Ukraine, market sources reported. Yields were seen lower by 1 basis point to 2 bps.

Meanwhile, Treasury yields were also mostly lower. The 30-year bond yield fell by 3 bps to close at 3.455%. The 10-year note yield fell by 1.5 bps to 2.623%, and the five-year note yield climbed by 1.5 bps to 1.617%.

Meanwhile, supply remains very subdued during this slow, short week, which includes Passover and Good Friday. New issues for the week will total about $2.5 billion, a bit less than initially anticipated.

Looking to secondary action, Puerto Rico bonds continue to take a beating. Puerto Rico 8% general obligation bonds due 2035 were seen at 87 with a 9.43% yield to maturity, down from the initial 93 at an 8.73% yield to maturity. On Friday, the bonds reportedly opened at 89.875 but tracked lower, dropping to 86 in the afternoon, said Alan Schankel, managing director with Janney Montgomery Scott LLC.

Washington sanitary bonds price

Moving to Tuesday's primary action, the Washington Suburban Sanitary District of Maryland priced $198,585,000 of series 2014 consolidated public improvement bonds.

The offering included $150 million of series 2014 consolidated public improvement bonds and $48,585,000 of series 2014 consolidated public improvement refunding bonds, said a pricing sheet.

The public improvement bonds are due 2015 to 2044 with 4% to 5% coupons and 0.10% to 3.76% yields.

The refunding bonds are due 2015 to 2022 with 2% to 5% coupons and yields from 0.13% to 1.98%.

The bonds (Aaa/AAA/AAA) were sold competitively. Citigroup Global Markets Inc. won the bid for the public improvement bonds at a 3.31% true interest cost. J.P. Morgan Securities LLC won the bid for the refunding bonds at a 1.23% TIC.

For the public improvement bonds, the district received six bids, spokesman James Neustadt said Tuesday. For the refunding portion, the district received nine bids.

Proceeds will be used to construct or reconstruct water supply facilities, water supply lines and transmission mains, sewage disposal facilities, sewer collection mains and trunk sewers and to refund the district's series 2004 consolidated public improvement bonds.

The refunding, Neustadt said, will result in a debt service savings of nearly $3.8 million over the next eight years.

Florence County, S.C., prices

Among the other competitive offerings conducted Tuesday was a $125 million deal from Florence County, S.C. The county sold series 2014 G.O. bonds.

The bonds (Aa2/AA-/) were sold competitively with JPMorgan winning the bid at a 1.377669% TIC, said Kevin Yokim, the county's director of finance.

Yokim said in an interview Tuesday after the offering priced that any G.O. issue above $1.5 million in South Carolina must be sold competitively. He also indicated that market conditions and the nature of the offering were also conducive to a competitive offering.

The bonds are due 2015 to 2021 with 1% to 4% coupons and 0.17% to 1.88% yields, said a pricing sheet.

Proceeds will be used to finance capital improvements for the county.

Jordan School brings deal

Elsewhere during the session, the Jordan School District of Utah came to market with $106.75 million of series 2014 G.O. refunding bonds.

The bonds (Aaa//AAA) were sold competitively with Morgan Stanley & Co. LLC winning the bid at a 1.312532% TIC, said D. Burke Jolley, the district's business administrator.

"We always sell our bonds competitively," Jolley said Tuesday.

The bonds are due 2015 to 2022 with 5% coupons and 0.15% to 1.97% yields, according to a pricing sheet.

Proceeds will be used to refund existing G.O. debt.

The district stands to save $9.7 million in gross interest savings and $8.23 million in net present value interest savings, Jolley said.

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