Municipals, Treasuries close weaker as oil rebounds; D.C. water authority sells $385.6 million

By Sheri Kasprzak

New York, Jan. 21 – Municipals ended another busy session on a softer note with yields rising as much as 3 basis points, traders reported.

The market was shoved lower, in part, by a weaker Treasuries market.

The 10-year muni bond yield rose by 2 bps to 1.83%. The 30-year yield rose by 3 bps to 2.78%, a trader said.

Meanwhile, Treasuries took a tumble, pressured by a rebound for oil prices and stocks. U.S. crude oil prices edged toward $30 per barrel. As a result, the 30-year Treasury bond yield rose by 2 bps to close at 2.79% and the 10-year benchmark note yield edged up 1 bp to 2.02%. The five-year yield held steady at 1.44%, but the two-year yield fell by 1 bp to 0.84%.

D.C. Water prices debt

It was another busy day for the primary market.

Heading up the action, the District of Columbia Water and Sewer Authority offered $385.61 million of series 2016A public utility subordinate revenue refunding bonds. The deal was upsized from $372.25 million.

The bonds (Aa3/AA/) were sold through senior manager Loop Capital Markets LLC.

The bonds are due 2019 and 2029 to 2039 with 2% to 5% coupons.

Proceeds will be used to refund the authority’s series 2007A, 2008A and 2009A public utility revenue bonds.

UMass sells bonds

One of the week’s many health-care offerings also hit the market Thursday. The Massachusetts Development Finance Agency sold $169,645,000 of series 2016I revenue bonds for the UMass Memorial Health Care Obligated Group. The offering was downsized from $176,445,000.

The bonds (/BBB+/A-) were sold through Morgan Stanley & Co. LLC.

The bonds are due 2018 to 2031 with term bonds due in 2036, 2041 and 2046. The serial bonds have 5% coupons. The 2036 bonds have a 5% coupon priced at 114.591. The 2041 bonds have a 4% coupon priced at 100.521 and a 5% coupon priced at 113.18. The 2046 bonds have a 5% coupon priced at 112.714.

Proceeds will be used to reimburse the obligated group for costs associated with construction, improvement and equipment acquisitions as well as to refund the obligated group’s series 1998A and 2005D revenue bonds.

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