Top-quality municipal bonds finished stronger on Thursday, according to traders, as the Dormitory Authority of the State of New York came to market with over $1 billion of bonds.
In the competitive arena, DASNY sold $1.09 billion of revenue bonds in three separate offerings.
JPMorgan Securities won the $400.04 million Series 2016A Group A state sales tax revenue bonds with a true interest cost of 1.39%. The series was priced as 5s to yield from 0.89% in 2019 to 1.66% in 2026.
Bank of America Merrill Lynch won the $387.14 million of Series 2016A Group C state sales tax revenue bonds with a TIC of 3.18%. The series was priced as 5s to yield from 2.13% in 2032 to 2.32% in 2036. BAML also won the $303.33 million of Series 2016A Group B state sales tax revenue bonds with a TIC of 2.43%. The series was priced as 5s to yield from 1.74% in 2027 to 2.07% in 2031.
The sales are rated triple-A by S&P Global Ratings and AA-plus by Fitch Ratings.
Alabama competitively sold $100.09 million of Series 2016C general obligation refunding bonds. Citigroup won the bonds with a TIC of 2.16%. The issue was priced to yield from 1.19% with a 5% coupon in 2022 to 2.64% with a 3% coupon in 2032. The deal is rated Aa1 by Moody's Investors Service, AA by S&P and AA-plus by Fitch.
In the negotiated sector, BAML priced and repriced the Central Florida Expressway's $614.9 million of Series 2016B senior lien refunding revenue bonds.
The issue was repriced to yield from 0.80% with a 3% coupon in 2017 to 3.07% with a 4% coupon in 2040. The issue is rated A2 by Moody's and A by S&P and Fitch except for split halves of the 2036 and 2037 maturities which are insured by Assured Guaranty Municipal and rated A2 by Moody's and AA by S&P.
Goldman Sachs priced and repriced the Pennsylvania Turnpike Commission's $411.23 million deal.
The $255.37 million of Third Series of 2016 Subseries A turnpike subordinate revenue refunding bonds were repriced as 5s to yield 2.33% in 2026, 2.48% in 2027, 2.73% in 2030, 2.78% in 2031; as 4s to yield 3.24% in 2034, as 5s to yield 2.99% in 2035, as 5s to yield 3.03% in 2036 and as 3 3/8s to yield 3.50% and as 4s to yield 3.43% in a split 2041 maturity. The series is rated A3 by Moody's and A-minus by Fitch.
The $79.84 million of First Series of 2016 motor license fund-enhanced turnpike subordinate special revenue refunding bonds were repriced as 5s to yield from 1.55% in 2022 to 2.83% in 2036. The series is rated A2 by Moody's and AA-minus by Fitch.
The $76.02 million of taxable Third Series of 2016 Subseries B turnpike subordinate revenue refunding bonds were priced at par to yield from 1.175% in 2017 to 2.928% in 2025. The taxables are rated A3 by Moody's and A-minus by Fitch.
Since 2006, the commission has issued over $15 billion of debt, with the most issuance occurring in 2009 when it issued 2.95 billion of bonds. It sold the least amount of bonds in 2007 when it sold $531.9 million of securities.
Citi priced and repriced the Turlock Irrigation District, Calif.'s $159.03 million of Series 2016 first priority subordinated revenue refunding bonds on Thursday.
The issue was priced as 5s to yield from 0.76% in 2018 to 2.51% in 2037, 2.58% in 2041 and 2.63% in 2046. The deal is rated A-plus by S&P and Fitch.
BAML priced and repriced the Wisconsin Health and Educational Facilities Authority's $204.41 million of Series 2016A&B revenue bonds for the Marshfield Clinic Health System.
The $190.77 million of Series 2016A bonds were priced to yield from 0.96% with a 5% coupon in 2017 to 3.48% with a 4% coupon in 2036; a 2040 maturity was priced as 3 1/2s to yield 3.69%, a 2042 maturity was priced as 5s to yield 3.24% and a split 2046 maturity was priced as 3 1/2s to yield 3.76% and as 5s to yield 3.28%.
The $13.64 million of Series 2016B was priced to yield from 0.96% with a 4% coupon in 2017 to 3.66% with a 3.5% coupon in 2037. The deal is rated A-minus by S&P and Fitch.
Secondary Market
The yield on the 10-year benchmark muni general obligation fell two basis points to 1.55% from 1.57% on Wednesday, while the yield on the 30-year decreased two basis points to 2.31% from 2.33%, according to the final read of Municipal Market Data's triple-A scale.
Treasuries were stronger on Thursday. The yield on the two-year Treasury declined to 0.77% from 0.79% on Wednesday, the 10-year Treasury yield dropped to 1.63% from 1.68% and the yield on the 30-year Treasury bond decreased to 2.36% from 2.41%.
The 10-year muni to Treasury ratio on Thursday was calculated at 95.2% compared to 94.2% on Wednesday, while the 30-year muni to Treasury ratio stood at 98.3% versus 93.5%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,630 trades on Wednesday on volume of $16.12 billion.
Tax-Exempt Money Market Fund Outflows
Tax-exempt money market funds experienced outflows of $5.53 billion, bringing total net assets to $139.53 billion in the week ended Sept. 19, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $5.27 billion to $145.06 billion in the previous week.
The average, seven-day simple yield for the 252 weekly reporting tax-exempt funds rose to 0.21% from 0.18% in the previous week.
The total net assets of the 886 weekly reporting taxable money funds decreased $23.27 billion to $2.504 trillion in the week ended Sept. 20, after an inflow of $13.91 billion to $2.527 trillion the prior before.
The average, seven-day simple yield for the taxable money funds remained at 0.12% from the week before.
Overall, the combined total net assets of the 1,138 weekly reporting money funds fell $28.80 billion to $2.644 trillion in the period ended Sept. 13, which followed an inflow of $8.64 billion to $2.672 trillion.
