Issuers from Texas, Maryland and Georgia came to the primary market, helping to make Thursday the busiest day of the week by number of larger deals priced. Municipal bonds were flat to stronger, as yields on shorter maturities were as many as five basis points lower, traders said.
Primary Market
Morgan Stanley priced and then re-priced Dallas Area Rapid Transit's $482.53 million of Series 2016A senior lien sales tax revenue refunding bonds. The bonds were priced to yield from 1.92% with a 5% coupon in 2026 to 2.66% with a 5% coupon in 2036. Term bonds in 2041, 2046 and 2048 were priced as 5s to yield 2.94%, 3.00% and 3.06%, respectively. The DART deal is rated Aa2 by Moody's Investors Service and AA-plus by Standard & Poor's.
Since 2007, DART has issued bonds on average once a year, selling about $4.32 billion, with the largest issuances in 2009 and 2010 when it offered $1 billion and $825 million, respectively. It didn't issue any bonds in 2011, 2013 or 2015.
In the competitive arena, the Metropolitan Atlanta Rapid Transit Authority, Ga., sold $242.985 million of refunding series 2016B sales tax revenue bonds, Third Indenture Series. The bonds were won by Morgan Stanley with a true interest cost of 3.30%. The bonds were priced to yield from 2.22% with a 5% coupon in 2030 to 2.64% with a 5% coupon in 2037. The deal is rated Aa2 by Moody's and AA-plus by S&P.
MARTA last competitively sold comparable bonds on Nov. 5, 2015, when Wells Fargo Securities won $181.57 million of Series 2015B sales tax revenue bonds, Third Indenture Series with a TIC of 3.899%.
The Maryland University System competitively sold two issues totaling $201.33 million. The deals consist of $140 million of Series 2016A auxiliary facility and tuition revenue bonds and $61.33 million of refunding Series 2016B auxiliary facility and tuition revenue bonds. Both sales are rated Aa2 by Moody's and AA-plus by S&P.
The Series 2016A bonds were won by Citi with a TIC of 2.55%. The bonds were priced to yield from 0.41% with a 5% coupon in 2017 to 3.08% with a 3% coupon in 2036.
Citi also won the Series 2016B bonds with a TIC of 1.85%. The bonds were priced to yield from 0.41% with a 2% coupon in 2017 to 2.50% with a 2.375% coupon in 2030.
The Chicago Board of Education's $725 million GOs were free to trade at noon, eastern time.
No large deals will price on Friday, as the market will start to eye next week's calendar.
Secondary Market
On Thursday, the yield on the 10-year benchmark muni general obligation was steady from 1.66% on Wednesday, while the 30-year muni yield was flat at 2.72%, according to a final read of Municipal Market Data's triple-A scale.
Treasuries were stronger at the close on Thursday. The yield on the two-year Treasury was down to 0.71% from 0.72% on Wednesday, while the 10-year Treasury yield was down to 1.86% from 1.88% and the 30-year Treasury bond yield fell to 2.70% from 2.71%.
The 10-year muni to Treasury ratio was calculated on Thursday at 89.2% compared to 85.8% on Wednesday, while the 30-year muni to Treasury ratio stood at 100.9% versus 99.6%, according to MMD.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $7.18 billion to $11.93 billion on Friday. The total is comprised of $3.77 billion of competitive sales and $8.16 billion of negotiated deals.
