Municipals hold steady; $9 billion slate ahead; Florida eyes $1.2 billion hurricane fund bonds

By Sheri Kasprzak

New York, Feb. 5 – The muni market held steady Friday as the market readied for a heavy new-issue slate, market insiders said.

The 10-year triple-A muni bond yield remained at 1.76% and the 30-year yield at 2.76%.

Meanwhile, Treasuries improved slightly with the 30-year bond yield falling 2 bps and the 10-year yield edging down 1 bp.

Looking to the week ahead, about $9 billion of new issues are on the calendar, led by a couple of billion-dollar offerings out of Florida and New York.

Moving to secondary, the Chicago Board of Education’s general obligation bonds (/B/B+) that priced this week saw some positive follow-through Thursday, traders said Friday.

The 7% of 2044, priced at an 8.5% yield, traded at 8.4% in small block-sized trades toward the end of the session.

Elsewhere in the market, inflows to municipal mutual funds totaled $673 billion through Feb. 2, according to Lipper Inc.

Florida hurricane deal ahead

The top deal of the week comes from the Florida State Board of Administration Finance Corp., which is set to price $1.2 billion of revenue bonds (Aa3/AA/AA). The offering had been postponed.

J.P. Morgan Securities LLC is the senior manager for the bonds.

The corporation plans to use the proceeds to provide cash to the Florida Hurricane Catastrophe Fund for insurance claims and to refund existing debt.

NYC Transitional bonds set

New York City Transitional Finance Authority is also set to price a billion-dollar offering. The authority is on the calendar Tuesday with $1 billion of future tax secured subordinate bonds (Aa1/AAA/AAA).

Barclays, Loop Capital Markets LLC, BofA Merrill Lynch, Goldman Sachs & Co., Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC and Wells Fargo Securities LLC lead the syndicate pricing the deal.

The offering includes $750 million of series 2016E-1 tax-exempt bonds, $195.42 million of series 2016E-2 taxable bonds and $54.58 million of series 2016E-3 taxable bonds.

Proceeds will finance general city capital expenditures.

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