The $225.9 million Nebraska Public Power District bonds are catching investors' eyes.
Well Fargo Securities is pricing the deal for retail Monday. The $201.4 million tax-exempt portion has bonds maturing from 2015 to 2034, and in 2039 and 2044. The $24.5 million taxable section has one maturity in 2015.
"The over $200 million deal will get gobbled up pretty quickly," a trader in New York said.
A trader in Chicago said the deal will get attention because Nebraska bonds are not commonly issued.
"It will certainly benefit from [Nebraska's] scarcity," he said. "The transaction is a new name from a less frequent issuer. It's a size deal and a diversifier for your portfolio."
The trader in New York also said the deal will do well because it is a power credit and investors are hungry for power bonds.
Only nine deals worth $722 million of electric power bonds were issued this May, down 19.3% from the $895 million in 22 issuances for the same month in 2013.
"Nebraska does well with public powers, it is usually a really good credit," the trader in New York said.
The bonds earned an A1 rating from Moody's Investors Service, and A from Standard & Poor's and an A-plus from Fitch Ratings.
"The credit is a little lower than I thought it would come," the trader in New York said. But Nebraska does not have a lot of debt, so I think the deal will do fine."
Morgan Stanley is holding a retail order period for $850 million of New York City general obligation bonds.
Yields on the $747.8 million series ranged from 0.78% with a 4% coupon in 2017 to 3.83% with a 3.75% coupon in 2034. There are sealed bids on bonds maturing in 2015 and 2016. Bonds maturing serially from 2028 to 2032 were not available for purchase during the retail order period. The bonds are callable at par in 2024.
Yields on $102.2 million series ranged from 0.78% with a 3% coupon in 2017 to 2.44% with a 4% coupon in 2022. There are sealed bids on bonds maturing from 2014 and 2016. There is no call option.
The deal will price for institutional sale on Wednesday and earned an A2 rating from Moody's, and AA from both Standard & Poor's and Fitch Ratings.
Municipal bond yields rose on Monday increasing by up to two basis points for bonds maturing in three to 21 years, and as much as one basis point for bonds with 22 year maturities, according to Municipal Market Data's triple-A scale. Bonds maturing in one to two years and in 23 to 30 years held steady.
Treasuries weakened Monday afternoon, with the two-year note climbing two basis points to 0.43% and the 10-year benchmark inching up one basis point to 2.61%. The 30-year yield was unchanged at 3.44% from Friday's market close.
