Prices of top-shelf municipal bonds were mostly steady at mid-session, according to traders, as the Lower Colorado River Authority deal priced.
Secondary Market
The yield on the 10-year benchmark muni general obligation on Wednesday was steady from 2.19% on Tuesday, while the yield on the 30-year GO was unchanged from 3.12%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were higher on Wednesday, with the yield on the two-year Treasury note falling to 0.70% from 0.71% on Tuesday, while the 10-year yield dropped to 2.15% from 2.18% and the 30-year yield decreased to 2.92% from 2.94%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 101.0% versus 98.2% on Monday, while the 30-year muni to Treasury ratio stood at 106.5% compared to 105.4%, according to MMD.
Primary Market
Barclays Capital priced the Lower Colorado River Authority, Texas' $135 million of Series 2015D refunding revenue bonds.
According to a market source, some of the issue was priced as 5s to yield 1.77% in 2020, 2.85% in 2025, 3.45% in 2030 and 3.58% in 2032.
The issue is rated A by Standard & Poor's and Fitch Ratings.
Since 1995, the Lower Colorado River Authority has issued roughly $7.67 billion of debt. The highest issuance years occurred in 1999 and 2010, when they issued $1.08 billion and $997 million, respectively. The LCRA did not issue any debt in 2007 and 2014.
Late on Tuesday, JPMorgan Securities priced the Dormitory Authority of the State of New York's $1.1 billion of Series 2015E general purpose state personal income tax revenue bonds for institutions after holding an order period for retail investors earlier in the day.
The DASNY issue was priced for institutions to yield from 0.50% with a 3% coupon in 2017 to 3.70% with a 3.50% coupon in 2037.
Earlier on Tuesday, the issue was priced for retail to yield from 0.90% with 2%, 4% and 5% coupons in a triple-split 2018 maturity to 3.70% with a 3.50% coupon in 2037. The 2027-2028, 2030-2035 and 2036 maturities were not offered to retail while the 2017 maturity was offered as a sealed bid.
The DASNY deal was rated Aa1 by Moody's and triple-A by S&P; the credit carries a stable outlook from both rating agencies.
"One development of note was the cheapening of Dorm PIT offerings in the secondary after the pricing of the $1 billion Dorm PIT deal," MMD Senior Analyst Randy Smolik said in a market comment. "The primary priced 5s as wide as +40/+41 basis points in the 15- to 20-year range. Secondary offerings on older issue bonds were as wide as +36 bps, in contrast to +33/+35 bps trading through most of August."
City Securities is slated to price Valparaiso, Ind.'s $143 million multi-school building construction first mortgage bonds. The issue is expected to be rated AA-plus by S&P.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 38,553 trades on Tuesday on volume of $8.774 billion.
