Municipals mixed; muni investors retreat; Florida to tap market; Washington in pipeline

By Cristal Cody

Tupelo, Miss., Oct. 2 – Municipals improved about 2 basis points to 5 bps in the belly of the curve on Friday after trading mostly flat in the previous session, according to market sources.

The long end softened about 5 bps.

Treasuries rallied on Friday on the weaker-than-expected September jobs report. The Labor Department reported that 142,000 jobs were added in September, well below the 201,000 forecast. The unemployment rate was unchanged for the month at 5.1%.

The five-year Treasury note yield dropped about 8 basis points to 1.27%, while the benchmark 10-year note yield fell 6 bps to 1.98%. The 30-year bond yield declined 3 bps to 2.8%.

In other municipal news, “after posting inflows the first time in five weeks, investors retreated, withdrawing $252.5 [million] from muni funds across all subsectors,” RBC Capital Markets, LLC analysts said in a note on Friday.

Florida to price $195.92 million

Coming up on Monday, the State of Florida intends to offer $195.92 million of Department of Transportation turnpike revenue refunding bonds, according to a notice of sale.

The series 2015B bonds (Aa3//AA-) have serial maturities from 2017 through 2036.

The bonds will price through a competitive sale.

Proceeds from the deal will be used to refund all or a portion of the outstanding series 2007A Department of Transportation turnpike revenue bonds.

San Francisco School plans two sales

Also in the week ahead, the San Francisco Unified School District in California is offering $297.95 million of general obligation and general obligation refunding bonds (Aa2/AA-/) competitively in two sales in October, according to a preliminary official statement.

The deal includes $226 million of series F 2015 proposition A election of 2006 bonds and series C 2015 proposition A election 2011 bonds.

The sale also includes $71.95 million of series 2015 general obligation refunding bonds.

The new money bonds will be offered competitively on Tuesday. The refunding bonds will price via a competitive sale on Thursday.

Public Financial Management, Inc. is the municipal advisor.

Proceeds will be used to refund the outstanding series 2006 proposition A election of 2003 general obligation bonds on June 15, 2016 and to partially refund the series A 2007 proposition A election of 2006 bonds on June 15, 2017.

Washington Sanitary District offers $390 million

Later in the month, the Washington Suburban Sanitary District of Montgomery and Prince George’s counties in Maryland intends to price $390 million of consolidated public improvement bonds of 2015, according to a preliminary official statement.

The bonds (Aaa/AAA/AAA) have serial maturities from 2016 through 2045.

The bonds will be offered competitively on Oct. 14.

The financial advisor is Public Advisory Consultants, Inc.

Proceeds from the offering will be used for funding for the construction or reconstruction of water supply facilities, water supply lines and transmission mains, sewage disposal facilities, water supply lines and sewer collection mains.

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