The big California tobacco bond deal was priced for retail investors in the primary market on Tuesday as prices of top-rated municipal bonds remained unchanged in the secondary.
Primary Market
Citigroup Global Markets priced the California's Golden State Tobacco Securitization Corp.'s $1.69 billion of Series 2015A enhanced tobacco settlement asset-backed bonds ahead of the institutional pricing on Wednesday.
The issue was priced for retail to yield from 0.72% with a 3% coupon in 2017 to 2.02% with a 5% coupon in 2022; as 5s to yield 2.55% in 2026; as 4s to yield 4.38% in 2031; as 3 1/2s to yield 3.60 and as 5s to yield 3.16% in a split 2032 maturity; as 4s to yield 3.67 and as 5s to yield 3.27% in a split 2035 maturity; and as 5s to yield 3.40 and as 4s to yield 3.80% in a split 2045 maturity.
No retail orders were being taken in the 2033, 2034 or 2040 maturities; the 2016 maturity was offered as a sealed bid.
The asset-backed securities are rated A1 by Moody's Investors Service and A by Standard & Poor's and Fitch Ratings.
Citigroup is also expected to price the Northeast Independent School District, Texas' $390 million of Series 2015 bonds Tuesday. The bonds are rated triple-A by Moody's and S&P.
In the competitive arena, the University of Kentucky sold three competitive issues totaling $282 million. All three issues are rated Aa2 by Moody's and AA by S&P.
Morgan Stanley won UK's $148.93 million of Series 2015 A general receipts bonds with a true interest cost of 3.6044%. No other pricing information was immediately available.
UK is also selling $110.76 million of Series 2015 B general receipts refunding bonds and $22.03 million of Series 2015 C general receipts refunding bonds. No pricing information was immediately available.
Since 1995, the UK has sold roughly $11.5 billion of bonds. The highest years of issuance occurred in 2009 and 2014, when the university sold $1.34 billion and $3.27 billion, respectively. The lowest issuance years came in 1995 and 1996, when it sold just $12 million and $2 million, respectively. The university last sold bonds on June 26, 2014, when Morgan Stanley won $99.68 million of bonds with a TIC of 2.0213%.
Wells Fargo Securities won the South Broward Hospital District, Fla.'s $165.07 million of Series 2015 hospital revenue and refunding revenue bonds for the South Broward Hospital District Obligation Group with a TIC of 3.4300%. The issue is rated Aa3 by Moody's and AA-minus by S&P. No other pricing information was immediately available.
Citi won the Port of Seattle's $154.26 million of limited tax general obligation and refunding bonds with a TIC of 3.0619%. The bonds were priced as 5s to yield from 0.24% in 2016 to 2.26% in 2027 and as 4s to yield from 2.75% in 2029 to 3.26% in 2040. The deal is rated Aa1 by Moody's and triple-A by both S&P and Fitch Ratings.
The Port last sold bonds on March 12, 2013 when Goldman, Sachs won $28 million of Series 2013A non-AMT limited tax GO refunding bonds with a TIC of 2.1475%
Secondary Market
Top-quality munis were steady at midday. The yield on the 10-year benchmark muni general obligation on Tuesday was unchanged from 1.94% on Monday, while the yield on 30-year GO was flat at 2.76%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were also unchanged on Tuesday. The yield on the two-year Treasury note was unchanged at 0.58% from Monday, while the 10-year yield was flat at 1.91% and the 30-year yield remained at 2.50%.
On Monday, the 10-year muni to Treasury ratio was calculated at 101.3% versus 100.6% on Friday, while the 30-year muni to Treasury ratio stood at 110.0% compared to 110.2%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $97.0 million to $12.836 billion on Tuesday. The total is comprised of $4.204 billion competitive sales and $8.632 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 34,817 trades on Monday on volume of $6.415 billion.
Most active on Monday, based on the number of trades, was the Cook Co., Ill., Series 2009C general obligation refunding 5s of 2020, which traded 295 times at an average price of 113.692 with an average yield of 1.9%; (initial offering yield of 4.01%).
