Market Post: Market Flat as Competitive Deals Look 'Fair'

Traders in the municipal bond market said the market was flat as pricing of primary deals got underway.

"It's all about the new issues so that's really the focus," a New York trader said. "The market isn't changed but it's definitely driven by new product."

He added competitive deals look like they are coming right on the market. "Competitive bids look fair. There is not a better bid or a worse bid. It's unchanged."

Wells Fargo priced $386 million of California State Public Works Board lease revenue bonds, rated A2 by Moody's Investors Service, A-minus by Standard & Poor's, and BBB-plus by Fitch Ratings.

Yields on the first series, $59.5 million of lease revenue bonds issued on behalf of the Judicial Council of California for the Yuba City Courthouse, ranged from 0.79% with 2% and 4% coupons in a split 2016 maturity to 3.80% with a 5% coupon in 2038. The bonds are callable at par in 2023.

Yields on the second series, $326.5 million of lease revenue refunding bonds issued on behalf of the Department of State Hospitals for Coalinga State Hospital, ranged from 0.56% with a 4% coupon in 2015 to 3.43% with a 5% coupon in 2029. The bonds are callable at par in 2023.

JPMorgan priced $262.6 million of Central Texas Regional Mobility Authority revenue refunding bonds in two series.

The first series, $157.7 million of senior lien revenue refunding bonds, were rated Baa2 by Moody's and BBB-minus by Standard & Poor's. Yields ranged from 0.84% with a 3% coupon in 2014 to 4.12% with a 5% coupon in 2043. The bonds are callable at par in 2023.

The second series, $104.9 million of subordinate lien revenue refunding bonds, were rated Baa3 by Moody's and BB-plus by standard & Poor's. Yields ranged from 1.24% with a 3% coupon in 2014 to 4.73% with a 5% coupon in 2042. The bonds are callable at par in 2023.

In the competitive market, JPMorgan won the bid for $434.5 million of Wisconsin GOs. Pricing details were not available by press time.

Kentucky's Louisville and Jefferson County Sewer District sold $230 million of bonds in two pricings, rated Aa3 by Moody's and AA by Standard & Poor's.

Bank of America Merrill Lynch priced $118.6 million of revenue bonds. Yields ranged from 0.47% with a 5% coupon in 2016 to 3.68% with a 4% coupon in 2038. The bonds are callable at par in 2023. Details on the second pricing of $111.4 million were not yet available.

Municipal bond scales ended steady to one basis point firmer on Monday.

Yields on the Municipal Market Data triple-A GO scale ended flat. The 10-year was steady at 1.70% for the fourth session and the 30-year closed unchanged at 2.90% for the second trading session. The two-year closed steady at 0.29% for the 12th session.

Yields on the Municipal Market Advisors 5% coupon triple-A benchmark scale ended flat to one basis point lower. The 10-year yield fell one basis point to 1.76%. The 30-year closed flat at 3.02% for the third session and the two-year was flat at 0.32% for the 12th session.

Treasuries were steady across the board. The benchmark 10-year and 30-year yields were flat at 1.70% and 2.88%, respectively. The two-year was flat at 0.23%.

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