Municipals close cheaper as market anticipates rate hike; Pace University prices $85.7 million

By Sheri Kasprzak

New York, March 20 - Wednesday's Federal Open Market Committee meeting indicated that although interest rates will remain steady for now, the Federal Funds rate could be hiked in as few as six months, forcing municipal yields up for another session, market insiders reported.

Municipals followed along with Treasuries, which were also off by a basis point or so during the session. A less-than-stellar auction of Treasury Inflation Protected Securities put more pressure on government yields.

After the auction, the five-year Treasury note yield, which jumped by 16 basis points on Wednesday, climbed another basis point to end the day at 1.708%. The 10-year note yield climbed by half a basis point to 2.779%, and the 30-year bond yield fell half a basis point to 3.667%.

Henrico bonds price

Among Thursday's pricing activity, Henrico County, Va., came to market with $74,165,000 of series 2014 water and sewer system revenue bonds.

The bonds were sold through Raymond James/Morgan Keegan, Davenport & Co. LLC and Wells Fargo Securities LLC.

The bonds are due 2015 to 2035 with term bonds due in 2039 and 2044, said a pricing sheet. The serial coupons range from 1% to 5% with 0.18% to 3.71% yields. The 2039 bonds have a 4% coupon and priced at 99.527 to yield 4.03%, and the 2044 bonds have a 4.125% coupon and priced at par.

Proceeds will be used to finance renovations and maintenance for the county's water and sewer system.

Pace University sells debt

Elsewhere during the session, the Westchester County Local Development Corp. of New York offered $85,665,000 of series 2014 revenue bonds for Pace University.

The bonds (/BB+/) were sold through BofA Merrill Lynch.

The bonds are due 2034 and 2042. The 2034 bonds have a 5% coupon and priced at 97.4, and the 2042 bonds have a 5.5% coupon and priced at par, according to a pricing sheet.

Proceeds will be used to finance the construction, acquisition and equipment of academic, business, residential, athletic and research facilities at the university's Pleasantville campus.

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