Municipals end volatile week on a quiet note; dust settles on Puerto Rico debt ahead of July 4

By Sheri Kasprzak

New York, July 2 – Though there might have been fireworks throughout the week, thanks in part to Puerto Rico’s announcement that it would be unable to repay about $72 billion of public debt, things wound down on Thursday as the market prepared to shutter for the Independence Day holiday.

Trading volume remained light, and primary activity was virtually nil.

Munis largely ignored an improved Treasuries market, which was bolstered by worse-than-expected jobs data. The five-year Treasury note yield fell by 6 basis points, and the 10-year yield fell by 3 bps.

Among the light trading activity, Puerto Rico’s 5.125% of 2037s were seen trading Thursday afternoon at 59.449, a 9.579% yield to maturity, after trading as high as 62.75 during the afternoon.

Although the 8% 2035s were very actively traded throughout the week, volume on those bonds backed off significantly Thursday, market sources reported.

North Carolina deal tops week

Looking to the week ahead, new-issue activity will crank back up, led by a $463.11 million offering from the North Carolina Municipal Power Agency No. 1.

The agency is on tap to price Catawba Electric revenue bonds (/A/A) through Morgan Stanley & Co. LLC.

Proceeds will be used to refund the agency’s series 2008A, 2008C, 2009A, 2010A-B and 2012A-B Catawba Electric revenue bonds.

Central Florida bonds ahead

In the competitive market, the Central Florida Expressway is set to price $193,695,000 of series 2015 senior-lien revenue bond anticipation notes (A2/A/A) in the week ahead.

The notes are due Jan. 1, 2019.

Proceeds will be used to provide short-term funding for a portion of the Wekiva Parkway project that extends from Sanford to Mount Dora. The project includes the extension of State Route 429, the addition of State Route 453 and various improvements to state and local roads.

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