Municipals close day mostly unchanged; New York City Transitional Finance brings $760 million

By Sheri Kasprzak

New York, April 8 - Municipals remained mostly flat to round out a busy primary session, market insiders said, largely ignoring higher Treasury prices as some of the larger offerings of the week hit the market.

"There's not a lot of movement, but there does seem to be a good deal of demand for what's pricing out there," a trader said in the early afternoon. "I'd call us flat on the day."

Meanwhile, the Treasuries market got a boost from the auction of $30 billion of three-year notes. After the auction, the 30-year Treasury bond yield fell by 2 basis points to end at 3.54%, and the 10-year note yield fell by 1.5 bps to 2.679%.

NYC Transitional bonds price

Heading up the primary action for the day was also the largest offering of the week. The New York City Transitional Finance Authority came to market with $760 million of series 2014D future tax secured subordinated bonds.

The deal included $650 million of series 2014D-1 tax-exempt bonds and $110 million of series 2014D-2 taxable bonds, according to a term sheet.

The 2014D-1 bonds are due 2016 to 2041 with 2% to 5% coupons.

The 2014D-2 bonds are due 2018 to 2026 with coupons from 1.75% to 3.78%. They all priced at par.

The bonds were sold through senior manager BofA Merrill Lynch.

Proceeds will be used to finance general city capital expenditures.

UConn sells debt

One of the larger offerings pricing Tuesday came from the University of Connecticut, which sold $201.99 million of series 2014 general obligation bonds.

The offering included $109.05 million of series 2014A G.O. bonds and $92.94 million of series 2014B G.O. refunding bonds, said a pricing sheet.

The 2014A bonds are due 2015 to 2034 with coupons from 2% to 5% and yields from 0.12% to 3.67%.

The 2014B bonds are due 2015 to 2025 with coupons from 2% to 5% and yields from 0.12% to 2.91%.

The offering, according to Alan Schankel, managing director with Janney Montgomery Scott LLC, saw solid demand from retail and strong institutional follow-through. The 20-year bonds were priced at 5% to yield 3.67%, 10 bps below Friday's initial retail pricing, Schankel said Tuesday.

The bonds (Aa3/AA/AA-) were sold through senior manager Wells Fargo Bank NA.

Proceeds will be used to finance capital improvements at the university and to refund existing G.O. debt.

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