The two-part New York City general obligation deal was upsized to $953.67 million and yields on the bonds were raised during its institutional sale period on Wednesday.
Yields on the $851.5 million portion of the deal were increased from two basis points to seven basis points in the intermediate maturities. Yields on the $105.05 million section of the deal were increased from two to six basis points.
"We tried to price retail order a bit aggressively in first two days, because retail investors are getting to buy bonds ahead of final pricing," Alan Anders, deputy director for finance at the mayor's Office of Management and Budget, said in an interview. "But we get good demand by aggressive pricing. We try to price aggressively on retail order period. For the institutional pricing for remaining bonds, all of our bond sales have small adjustments for the rest of the unsold balance."
The yields had already been raised by two basis points on all maturities on the second day of retail sale. The deal was upsized by $103.67 million from an originally scheduled $850 million.
"On the sizing, there were enough strong indications of interest from institutions before it went into market that we felt comfortable upsizing from $850 [million] to $953 [million]," Anders said. "There was strong indication of interest from institutional investors."
Yields for the $851.5 million portion ranged from 0.82% with a 4% coupon in 2017 to 3.89% with a 3.75% coupon in 2034. Yields on the other second part of the issuance ranged from 0.82% with a 3% coupon in 2017 to 2.52% with a 5% coupon in 2022.
The first part of the issuance has sealed bids in 2015 and 2016, and an optional par call in 2024. The second section has sealed bids for bonds maturing from 2014 to 2016, and no optional call.
Moody's Investors Service rated the bonds Aa2 and Standard & Poor's and Fitch Ratings gave them AA ratings.
Anders said yields had been increased during the bonds' second day of retail to follow the Municipal Market Data curve, which showed bonds were selling off slightly. On Wednesday yields continued to rise in parts of the curve increasing by up to two basis points for bonds maturing in five years, and by one basis point for bonds maturing in six years, according to MMD's AAA scale.
Yields held steady for bonds maturing in one to four years, and for bonds with seven- to 24-year maturities. Bonds maturing in 25 to 30 years' yields dropped by up to one basis point.
Anders said the decision to raise yields on the NYC GOs during their institutional sale is unrelated to the MMD curve.
"It's a tough market and you have to make adjustments because of adjustments with the MMD, and the deal was probably upsized to make accommodations to the market," a trader in New York said.
Barclays Capital priced a two-fold deal totaling $592.3 million of South Carolina Public Service Authority revenue bonds.
Yields on the $550 million portion ranged from par with a 2.50% coupon in 2049 to 4.45% with a 5.50% coupon in 2054. The bonds are callable at par in 2024 except bonds maturing in 2049, which are callable in 2019.
Yields on the $42.3 million bonds ranged from 3.67% with a 5% coupon in 2031 to 4.06% with a 5% coupon in 2038. The bonds are callable at par in 2024. The deal is rated A1 by Moody's and AA-minus by both S&P and Fitch.
BMO Capital Markets priced $191.3 million of Wyandotte County, Kan., Unified Government board of public utilities improvement and refunding revenue bonds. Yields ranged from 0.60% with a 4% coupon in 2016 to 4.20% with a 5% coupon in 2044. There is a sealed bid in 2015. The bonds are callable at par in 2024. The bonds mature serially from 2014 to 2034 with term bonds in 2039 and 2044. The deal is rated A3 by Moody's and A-plus by both S&P and Fitch.
JP Morgan Securities priced three-part deal totaling $148.8 million of Massachusetts Housing Finance Agency housing bonds.
The $110.9 million alternative minimum tax bonds were priced at par to yield from 0.18% in 2014 to 4.70% in 2047. The bonds are callable at par in 2023.
The $ 25.8 million non-alternative minimum tax bonds were priced at par to yield from 0.20% in 2014 to 4.60% in 2055. The bonds are callable at par in 2023.
The $12.2 million federally taxable bonds were priced at par to yield from 0.25% in 2014 to 5% in 2045. The bonds are callable at par in 2023.The deal is rated Aa3 by Moody's and AA-minus by both S&P and Fitch.
Wells Fargo Securities priced $130 million of Regional Transportation Authority of Pima County, Ariz., tax revenue bonds. Yields ranged from 0.12% with a4% coupon in 2015 to 2.88% with a 5% coupon in 2026. The bonds are callable at par in 2023. The deal is rated AA-plus by S&P and AA by Fitch.
Citigroup Global Markets released the final pricing wire for $125.7 million of the University of North Carolina at Greensboro revenue bonds. Yields ranged from 0.19% with a 2% coupon in 2015 to 3.85% with a 5% coupon in 2039.The bonds are callable at par in 2024. The deal is rated Aa3 by Moody's and A by S&P.
Morgan Stanley priced $111.9 million of Clear Creek Independent School District, Texas, unlimited tax school building and refunding bonds. Yields ranged from 0.29% with a 3.25% coupon in 2016 to 3.44% with a5% coupon in 2039. The bonds are callable at par in 2024. The deal is rated AAA by both S&P and Fitch.
Morgan Stanley has won the bid for $100 million of Maryland Department of Transportation consolidated bonds. Yields ranged from 0.62% with a 5.50% coupon in 2017 to 3.22% with a 3.50% coupon in 2029. The bonds are callable at par in 2022. The deal is rated Aa1 by Moody's, AAA by S&P and AA-plus by Fitch.
Treasuries were mostly steady Wednesday afternoon, with the 30-year and the two-year note remaining unchanged from Tuesday's market close at 3.47% and 0.43%, respectively.
