Long Muni Yields Fall 9 bps; NYC GOs Priced for Institutions

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Top-rated municipal bonds were substantially stronger at mid-session, according to traders, with yields on some longer maturities falling by as much as nine basis points.

The yield on the 10-year benchmark muni general obligation dropped six to eight basis points from 2.51% on Monday, while the yield on the 30-year declined seven to nine basis points from 3.32%, according to a midday read of Municipal Market Data's triple-A scale.

U.S. Treasuries were narrowly mixed on Tuesday. The yield on the two-year Treasury was unchanged from 1.12% on Monday, the 10-year Treasury rose to 2.39% from 2.38%, while the yield on the 30-year Treasury bond increased to 3.07% from 3.05%.

On Monday, the 10-year muni to Treasury ratio was calculated at 105.2% compared to 106.3% on Friday while the 30-year muni to Treasury ratio stood at 108.7% versus 108.8%, according to MMD.

MSRB: Previous Session's Activity

The Municipal Securities Rulemaking Board reported 53,701 trades on Monday on volume of $11.61 billion.

Primary Market

New York City came to market with over $1 billion of general obligation bonds in negotiated and competitive offerings, in a deal traders said met with good demand.

On Tuesday, Jefferies priced NYC's $805.12 million of Fiscal 2008 and 2017 bonds for institutions after holding a one-day retail order period, which was originally slated to be two days. Sources told The Bond Buyer the city received about $469 million of retail orders on the deal Monday and decided to move up the institutional pricing by a day.

The $650 million of Fiscal 2017 Subseries B-1 bonds were priced for institutions on Tuesday to yield from 1.90% with a 5% coupon in 2020 to 3.75% with a 5% coupon in 2038. A 2041 maturity was priced as 5s to yield 3.79% and a 2043 maturity was priced as 4s to yield approximately 4.12%. The 2018 and 2019 maturities were offered as sealed bids.

The $66.945 million of Fiscal 2008 Subseries J-7 bonds were priced to yield 1.90% with 4% and 5% coupons in a split 2020 maturity and 2.17% with 4% and 5% coupons in a split 2021 maturity.

The $88.175 million of Fiscal 2008 Subseries J-9 bonds were priced to yield 2.81% with 4% and 5% coupons in a split 2025 maturity, 2.93% with 3% and 5% coupons in a split 2026 maturity, and 3.02% with 3% and 5% coupons in a split 2027 maturity.

The competitive sales were also moved up by a day.

On Tuesday afternoon, NYC will competitively sell $200 million of taxable GOs in two separate offerings, consisting of $149.915 million of Fiscal 2017 Subseries B-2 taxable GOs and $50.085 million of Fiscal 2017 Subseries B-3 taxable GOs.

All the deals are rated Aa2 by Moody's Investors Service and AA by S&P Global Ratings and Fitch Ratings.

Since 2006, NYC has sold roughly $49.6 billion of securities, with the largest issuance occurring in 2008, when it sold $6.6 billion. The city that never sleeps has sold more than $2 billion every year since 2006, and sold more than $5 billion in a year five times during the same period.

William Blair & Co. priced Connecticut's $327.65 million of Series 2016G GO refunding bonds on Tuesday for institutions after holding a one-day retail order period on Monday.

The issue was priced to yield from 1.62% with 2%, 3%, 4% and 5% coupons in a quadruple-split 2018 maturity to 2.79% with a 3% coupon in 2023. A 2017 maturity was offered as a sealed bid.

The deal is rated Aa3 by Moody's and AA-minus by S&P, Fitch and Kroll Bond Rating Agency.

Citigroup priced the state of Mississippi's $190.64 million of Series 2016B tax-exempt GOs.

The issue was priced as 5s to yield from 2.66% in 2025 to 3.45% in 2036. The deal is rated Aa2 by Moody's and AA by S&P and Fitch.

JPMorgan is expected to price the Phoenix Civic Improvement Corp., Ariz.'s $381 million of Series 2016 junior lien water system revenue refunding bonds on Tuesday. The deal is rated Aa2 by Moody's and triple-A by S&P.

Since 2006, the Phoenix CIC has sold roughly $5.3 billion of securities, with the highest issuance occurring in 2014 when it sold $726 million. The corporation saw a low year of issuance in 2012, when it issued $66 million. The sale on Tuesday puts the CIC over $600 million for the year.

RBC Capital Market is set to price the Minneapolis-St. Paul Metropolitan Airports Commission's $226 million of Series 2016C non-AMT senior airport revenue bonds and Series 2016D AMT subordinate airport revenue bonds on Tuesday. The senior bonds are rated AA-minus by S&P and Fitch and the subordinate bonds are rated A-plus by S&P and Fitch.

Also for the Minneapolis-St. Paul Airports, Wells Fargo Securities priced $171.71 million of taxable Series 2016E subordinate airport revenue bonds. The issue was priced to yield from about 60 basis points over the comparable Treasury security in 2019 to about 185 basis points over the comparable Treasury security in The deal is rated A-plus by S&P and Fitch.

Bond Buyer Visible Supply

The Bond Buyer's 30-day visible supply calendar decreased $23.5 million to $15.06 billion on Tuesday. The total is comprised of $3.62 billion of competitive sales and $11.44 billion of negotiated deals.

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