Municipals end day unchanged to firmer as Treasuries rally; new issues to total $4 billion

By Sheri Kasprzak

New York, July 25 – Municipals were flat to somewhat firmer during the session amid light secondary action as the market prepared for a rather modest $4 billion new-issue calendar in the week ahead, insiders said.

“There’s not a great deal of movement, but there could be a case for some firmness, particularly for intermediate to long bonds,” a trader said in the afternoon.

Treasuries were largely ignored during the day as yields dipped following the release of data. By the end of the session, the 30-year Treasury bond yield fell by 6 basis points to close at 3.238% and the 10-year note yield fell by 4 bps to 2.467%, ending the week 1.5 bps lower. The five-year note yield fell by 2.5 bps to 1.675%.

Municipal mutual funds saw inflows of about $686 million for the week ended Wednesday, reversing a recent trend of outflows.

California State leads deals

Heading up the week’s meager calendar is a substantial deal from California State University, which is slated to price $744,235,000 of series 2014A system-wide revenue bonds (/AA-/) on Thursday.

Barclays, Stifel, Nicolaus & Co. and Siebert Brandford Shank & Co. LLC are the senior managers for the offering.

The bonds are due 2014 to 2044.

Proceeds will be used to finance improvements to student housing, student unions, parking, student health and continuing education centers at all 23 CSU campuses and to refund existing debt.

George Washington bonds ahead

Also on Thursday, George Washington University is set to price $300 million of series 2014 taxable bonds through J.P. Morgan Securities LLC and Loop Capital Markets LLC.

The bonds will be utilized for general corporate purposes, including capital improvements.

Also ahead during the week, the Illinois Sports Facilities Authority is set to hit the market with $285 million of series 2014 sports facilities refunding bonds through Barclays and Goldman Sachs & Co.

The bonds (/A/BBB+) will be issued to refund a portion of the authority’s series 2001, 2003 and 2008 sports facilities bonds.

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