Municipal bond traders are looking forward to another day of hefty issuance with several deals of size on the calendar. And, quite appropriately, on Earth Day, leading Wednesday's slate is the pricing by Goldman, Sachs of Connecticut's $250 million of green bonds.
Primary Market
In what will be the Nutmeg State's first all-green bond sale, the bonds will finance wastewater and drinking water infrastructure projects statewide.
Wednesday's sale follows the state's first issuance of $60 million green bonds in the Fall of 2014, which was just a part of an overall $300 million GO sale.
The deal is rated triple-A by Moody's Investors Service, Standard & Poor's and Fitch Ratings.
According to state Treasurer Denise Nappier, Connecticut will again follow the process guidelines as specified by the green bond principles, a voluntary standard that a group of environmental finance experts and active banks established last year.
She said green bond offerings are designed to meet the needs of an expanding investor group with mandates to invest in sustainable projects.
Elsewhere, Citi is slated to price the Sacramento Municipal Utility District's $195 million of electric revenue bonds on Wednesday. The deal is rated Aa3 by Moody's and A-minus by S&P.
And JPMorgan is expected to price Allen County, Ohio's $152 million of Series 2015A hospital facilities revenue refunding improvement bonds for Mercy Health. JPMorgan is also set to price a $150 million Series 2015C taxable offering for Mercy Health. The issues are rated A1 by Moody's and AA-minus by S&P.
On Tuesday, the Chicago Board of Education came to market with $295.68 million of unlimited tax GOs, consisting of $275.68 million of Series 2015C project bonds and $20 million of Series 2015E green bonds, backed by dedicated alternative revenues.
PNC Capital Markets priced the Series 2015C bonds as a split maturity in 2035 as 5 1/4s to yield 5.53% and as 6s to yield 5.38%; a 2039 maturity was priced as 5 1/4s to yield 5.63%. The green bonds were priced as a 2032 bullet maturity as 5 1/8s to yield 5.42%.
The bonds were oversubscribed with more than 100 buyers participating, according to finance team members. The issue is rated A-minus by S&P, BBB-minus by Fitch and BBB-plus by Kroll Bond Rating Agency.
Secondary Market
Treasury prices were mixed on Wednesday as the yield on the two-year Treasury note was flat at 0.52% from Tuesday, while the 10-year yield remained at 1.91% and the 30-year yield slipped to 2.58% from 2.59%.
Prices of top-shelf municipal bonds ended weaker on Tuesday. The yield on the 10-year benchmark muni general obligation rose one basis point to 1.95% from 1.94% on Monday, while the yield on the 30-year GO increased by two basis points to 2.86% from 2.84%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Tuesday at 100.3% versus 102.6% on Monday, while the 30-year muni to Treasury ratio stood at 109.6% compared to 110.9%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $2.268 billion to $9.482 billion on Wednesday. The total is comprised of $2.908 billion competitive sales and $6.574 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 42,418 trades on Tuesday on volume of $10.956 billion.
The most active bond, based on the number of trades, was the Pennsylvania State Turnpike Commission's Subordinate 2008 Series B-1 revenue 5 5/8s of 2030, which traded 146 times at an average price of 112.964 with an average yield of 1.345%. The bonds were initially priced at 102.458.
—Paul Burton contributed to this report.
