Municipals strengthen as offerings price; Atlanta brings $1.24 billion water, wastewater deal

By Sheri Kasprzak

New York, Feb. 25 – Municipal bond prices were higher Wednesday following in line with stronger Treasuries as the remaining large offerings of the week priced, insiders said.

Treasuries got a boost again Wednesday from Federal Reserve chairwoman Janet Yellen’s second day of Congressional testimony, with yields lower by 3 basis points to 4 bps.

Municipal yields were pretty much in line with Treasury yields, with both falling by as much as 3 bps, said a trader in the afternoon.

“We’re following Treasuries, but we’re also seeing good demand [for new issues],” said the trader.

Atlanta brings bonds

Heading up the day’s primary activity, the City of Atlanta hit the market with $1,244,985,000 of series 2015 water and wastewater revenue refunding bonds.

The bonds (Aa3/AA-/A+) were sold through Loop Capital Markets LLC and Goldman Sachs & Co.

The bonds are due 2016 to 2035 with term bonds due in 2040 and 2043, according to a pricing sheet. The serial coupons range from 2% to 5%. The 2040 bonds have a 5% coupon priced at 113.801, and the 2043 bonds have a 5% coupon priced at 113.525.

Proceeds will be used to refund the city’s series 2001A, 2004 and 2009A water and wastewater revenue bonds.

Pennsylvania bonds price

Elsewhere, the Pennsylvania Economic Development Authority brought $721,485,000 of series 2015 tax-exempt private activity rapid bridge replacement bonds.

The bonds (/BBB/) were sold through senior managers J.P. Morgan Securities LLC and Wells Fargo Securities LLC.

The bonds are due 2018 to 2028 with term bonds due in 2030, 2034, 2038 and 2042, according to a term sheet. The serial coupons range from 4% to 5% with yields from 1.17% to 3.77%. The 2030 bonds have a 5% coupon priced at 110.728 to yield 3.82%, and the 2034 bonds have a 5% coupon priced at 109.766 to yield 3.92%. The 2038 bonds have a 4.125% coupon priced at 97.404 to yield 4.3% and a 5% coupon priced at 109.098 to yield 3.99%. The 2042 bonds have a 5% coupon priced at 108.719 to yield 4.03%.

Proceeds will be used to fund a portion of the Pennsylvania Rapid Bridge Replacement project.

UMass offering sold

Also during the day, the University of Massachusetts Building Authority priced $490.62 million of series 2015 revenue bonds.

The bonds (Aa2/AA-/AA) were sold through senior managers Citigroup Global Markets Inc. and Raymond James/Morgan Keegan.

The deal included $298,795,000 of series 2015-1 project revenue bonds and $191,825,000 of series 2015-2 refunding bonds, according to a pricing sheet.

The 2015-1 bonds are due 2015 to 2036 with term bonds due in 2040 and 2045. The serial coupons range from 4% to 5% with 2.45% to 3.54% yields. The 2040 bonds have a 5% coupon priced at 116.363 to yield 3.17%. The 2045 bonds have a 4% coupon priced at 102.873 to yield 3.67%.

The 2015-2 bonds are due 2017 to 2036 with 3% to 5% coupons and 0.75% to 3.54% yields.

Proceeds will be used to finance capital projects at the Boston campus including construction of an athletic training facility, improvements to a library, to make electrical upgrades and facilitate other campus-wide improvements, as well as to refund outstanding revenue bonds.

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