Market Post: $250M Massport Institutional Sale Pushed Up During Muni Sell-Off

The $250 million Massachusetts Port Authority revenue refunding bond's institutional order period has been accelerated to Wednesday.

"The transaction is going well and we accelerated the institutional order period (previously scheduled for tomorrow) to today," DJ Mehigan, managing director at Raymond James Public Finance, which served as the lead banker on the Massachusetts Port Authority deal, said in an emailed statement.

A trader in New York speculated the intuitional order period was pushed up because the market continued to sell-off on Wednesday, with yields rising by as much as one basis point for bonds maturing in five to six years and 11 to 22 years, according to Municipal Market Data's triple-A scale. Bonds maturing in seven to eight years and 23 to 29 years yields grew by as much as two basis points.

"They are probably trying to get it in before the market goes down further," a second trader in New York said.

Raymond James priced the three-part issuance with yields on the deal's largest $156.8 million section ranging from 0.39% with a 2% coupon in 2016 to 3.46% with a 3.4% coupon in 2029. There was a sealed bid on the 2015 maturity and bonds maturing from 2025 to 2028 and 2029 to 2035 were not available for retail purchase.

The second largest part of the deal, $48.2 million, had yields ranging from 0.86% with a 4% coupon in 2017 to 3.01% with a 5% coupon in 2024. There was no retail order period for the series' bonds maturing from 2025 to 2044. The bonds are subject to an alternative minimum tax.

The final $45.4 million segment of the issuance was not available for retail purchase and no pricing was available at press time.

The deal is rated Aa3 by Moody's Investors Service, AA-minus by Standards and Poor's and AA by Fitch Ratings.

The first trader in New York said the Port Authority probably wants to sell before another Puerto Rico scandal hits and muni yields hike further.

"[They're selling more because] it's a combination of absolute low rates and enough volatility, especially from our lovely Puerto Rico," a trader on the west coast said, who also mentioned that summer is seasonally a "cash-rich" time for munis.

The North Texas Municipal Water District water system revenue refunding and improvement bonds issuance's amount was also increased. It rose to $171 million from an originally scheduled $155.8 million.

Yields ranged from 0.36% with a 4% coupon in 2015 to 3.69% with a 3.75% coupon in 2034. Bank of America Merrill Lynch was the lead underwriter and there is an option call at par in 2024. The deal is rated Aa2 by Moody's and AAA by S&P.

The Indiana Finance Authority tax-exempt private activity deal was downsized slightly to $243 million from an expected $250 million. Citigroup Global Markets priced the deal with yields ranging from 0.60% with a 1.55% coupon in 2017 to 0.6% with a 5.50% coupon in 2046.

The bonds have an optional call at par in 2024, except for the 2017 maturity which can be called in 2016 at par, and buyers can make a whole call at MMD plus 30 basis points at any time.

There are term bonds in 2017, 2034, 2039 and 2046. The deal is rated BBB-minus by S&P and BBB by Fitch Ratings.

The Connecticut Health and Educational Facilities Authority issued $250 revenue bonds for Yale University. The bonds were priced by Barclays Capital at par to yield 0.8% in 2048, with a mandatory put date of 2017.

The bonds are not callable. The deal is rated Aaa by Moody's and AAA by S&P.

The trader on the west coast said in secondary trading no one is paying attention to anything but Puerto Rico.

"I wish there was something else to look at," he said.

Treasuries weakened slightly with the 10 year rising by two basis points to 2.58%, and the two year note by one basis point to 0.53%. The 30 year held steady at 3.38%.

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