Municipals hold steady, firm slightly; new issue volume in week ahead to total $5.5 billion

By Sheri Kasprzak

New York, June 13 – Despite a sagging Treasuries market, municipals remained mostly unchanged and even saw some firmness in spots, said a trader in the afternoon.

Thursday’s underperformance of Treasuries sparked some positive follow-through on Friday in secondary, said a trader. Gains were seen in longer bonds.

Municipals significantly outperformed sinking Treasuries on the session Friday after Bank of England Gov. Mark Carney stated he believes interest rates there could climb in the near future, market insider said.

The news set off a ripple effect in the U.S. markets as investors expressed concern over interest rates here, said one market source.

By the end of the session, the five-year Treasury note yield, which is more sensitive to rate changes, climbed by 4 basis points to close at 1.701%. The 10-year note yield rose by 2 bps to 2.604%, and the 30-year bond yield climbed a touch to 3.41%.

Georgia to sell debt

At $5.5 billion, the new issue slate for the week ahead will be more manageable than the $9 billion calendar of the week just concluded.

Heading up the week’s new issues, the State of Georgia plans to price $977.83 million of series 2014 general obligation bonds.

The Georgia deal will include four tranches and will be sold competitively on Tuesday.

The deal includes $649.97 million of series 2014A G.O. bonds, $151,115,000 of series 2014B taxable bonds, $13.75 million of series 2014C taxable qualified school construction bonds and $162,995,000 of series 2014D G.O. refunding bonds.

Proceeds will be used to finance various capital outlay projects for the state and to refund existing G.O. debt.

Chicago Transit bonds ahead

Another major offering in the week ahead comes from the Chicago Transit Authority. The authority is set to price $555 million of sales tax receipts revenue bonds (/AA/) through Loop Capital Markets LLC on Tuesday.

The proceeds from the sale will be used to finance capital projects under the authority’s capital plan.

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