Municipals close narrowly mixed as pricings wrap up; State Building Authority closes offering

By Sheri Kasprzak

New York, July 30 – Municipals rounded out another busy session Thursday mixed along with Treasuries amid strong economic data, market insiders said.

Yields on shorter maturities were flat to slightly higher as longer bonds saw yields fall. This is in line with Treasuries, which saw the 30-year bond yield fall by 3 bps and the five-year yield hold steady.

Elsewhere in muni news, municipal mutual funds reportedly saw $250 million of inflows for the week ended July 22, said a note from the Investment Company Institute. This represents the strongest pace of inflows since April.

State Building brings bonds

Leading the day’s primary activity, the week’s largest deal hit the market.

The State Building Authority of Michigan sold $989,945,000 of series 2015-I facilities program revenue and revenue refunding bonds. The offering was slightly downsized from $990 million.

The bonds were sold through lead managers J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC.

The bonds are due 2015 and 2019 to 2035 with term bonds due in 2038, 2040, 2045 and 2050. The serial coupons range from 2% to 5%. The 2038 bonds have a 5% coupon and priced at 111.335, the 2040 bonds have a 4% coupon and priced at 98.761, the 2045 bonds have a 5% coupon and priced at 110.089, and the 2050 bonds have a 5% coupon and priced at 108.599.

Proceeds will be used to refund the authority’s series 2005, 2006 and 2008 revenue and refunding bonds.

Columbus offers G.O. bonds

In other pricing action, the City of Columbus, Ohio, sold $333.48 million of series 2015 general obligation bonds and notes in a four-tranche deal.

The deal included $230,655,000 of series 2015A various purpose unlimited tax G.O. bonds (Aaa/AAA/AAA), $74,685,000 of series 2015B various purpose limited tax G.O. bonds (Aaa/AAA/AAA), $13.64 million of series 2015C taxable bonds (Aaa/AAA/AAA) and $14.5 million of series 2015 limited tax notes (MIG 1).

The 2015A bonds are due 2017 to 2036 with 2% to 5% coupons and 0.70% to 3.35% yields.

The 2015B bonds are due 2017 to 2036 with coupons from 2% to 4% and yields from 0.69% to 3.50%.

The 2015C bonds are due 2017 to 2031 with 1.25% to 3.74% coupons and yields from 0.88% to 3.74%.

The 2015 notes are due Aug. 11, 2016, have a 2% coupon and priced at 101.816 to yield 0.171%.

The bonds were sold competitively.

Proceeds will be used to finance public safety and health, parks and recreation, information technology, streets and highways, public utilities, fleet management and economic development improvement projects.

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