Prices of top-rated municipal bonds were slightly stronger at mid-session, with yields on some maturities as much as one basis point lower, according to traders.
The market is currently flooded with new deals. California's $1.9 billion GOs leads the way for negotiated, while Maryland's combined $822.7 million is the biggest competitive.
Primary Market
Bank of America Merrill Lynch and Morgan Stanley priced California's $1.9 billion general obligation bonds for institutions. The $793.50 million general obligation new money part is priced as 4s to yield from 0.17% in 2016 to 3.28% as 5s in 2045.
The $1.136 billion refunding part of the deal is priced to yield from 0.17% in a split maturity in 2016, with $50 million as 2s, $50 million as 3s and $61.545 million as 5s, to 2.90% as 5s in 2030. The deal is rated Aa3 by Moody's Investors Service and A-plus by both Standard and Poor's and Fitch Ratings.
Maryland auctioned two issues totaling $822.7 million on Wednesday.
Bank of America Merrill Lynch won the larger issue of $518 million of tax-exempt First Series A State and Local Facilities Loan of 2015 GOs with a true interest cost of 2.646%. It is priced to yield 0.90% in 2018 with a 5% coupon to 2.89% with a 4% coupon in 2029. The 2030 maturity is priced at 98.50, with a 3% coupon.
Citi won the second issue of $364.695 million of tax exempt refunding First Series B State and Local Facilities Loan of 2015 GO with a true interest cost of 2.1433%.it is priced to yield from 1.40% with a 4% coupon in 2020 to 2.40% as 4s in 2026.
Both issues are rated triple-A by Moody's, S&P and Fitch.
Wells Fargo priced $344.64 million for Arizona State University in two series. Series 2015A, $181.775 million of system revenue and refunding green bonds, is priced to yield from 1.32% with a 2% coupon in 2019 to 3.35% as 5s in 2046. The 2015 maturity was offered as a sealed bid.
The second series is $162.865 million of system revenue and refunding bonds, Series 2015B is priced to yield from 0.40% as 3s in 2016 to 3.35% as 5s in 2046. The 2015 maturity was offered as a sealed bid. The deal is rated Aa3 by Moody's and triple-A by S&P.
Wells Fargo priced the University of Virginia's $185.110 million of general revenue pledge refunding bonds in two series.
The $87.215 million Series 2015 A-1 is priced as 4s to yield 3.43% in 2045. The $97.895 million Series 2015 A-2 green bonds are priced with a split maturity in 2045, with $30 million priced at par with a 3.625% coupon and $67.895 million priced as 5s to yield 3.02%. The deal is rated triple-A by both Moody's and S&P and has an expected triple-A rating from Fitch as well.
Wells Fargo earned a hat trick, with a third large deal: Indiana University's $141.970 million of consolidated revenue bonds, priced to yield 0.30% with a 3% coupon in 2016 to 3.55% as 4s in 2042.This deal has a triple-A rating from Moody's and an expected AA-plus from S&P.
Secondary Market
The yield on the 10-year benchmark muni general obligation at midday on Wednesday was steady from Tuesday's 2.08%, while the yield on the 30-year GO is as much as one basis point lower from Tuesday's 2.93%, according to the latest read of Municipal Market Data's triple-A scale.
Treasury prices were mixed midday Wednesday, as the yield on the two-year Treasury note decreased to 0.67% from 0.68% at the close Tuesday, while the 10-year yield remained flat at 2.12% and the 30-year yield inched up to 2.72% from 2.71%.
The 10-year muni to Treasury ratio was calculated at 97.9% on Tuesday versus 98.5% on Monday, while the 30-year muni to Treasury ratio stood at 107.9% compared to 108.1%.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 41,024 trades on Tuesday on volume of $7.165 billion.
Most active on Tuesday, based on the number of trades, was the city of Chicago general obligation bonds, refunding Series 2012C 5s of 2023, which traded 179 times at an average price of 107.027, with an average yield of 3.819%.
