Prices of top-quality municipal bonds were weaker at mid-session, traders said, with yields on some maturities rising by as much as four basis points.
A large number of competitive offerings were sold on Tuesday, led by the state of Ohio's three-pronged general obligation bond sale.
Primary Market
The Buckeye State sold three separate competitive issues totaling $345 million. All three issues are rated Aa1 by Moody's Investors Service and AA-plus by Standard & Poor's and Fitch Ratings.
JPMorgan won Ohio's $300 million of Series 2015B common schools GOs with a true interest cost of 3.4423%. The bonds were priced to yield from 0.25% with a 2% coupon in 2016 to 2.92% with a 5% coupon in 2035.
Goldman, Sachs won the $35 million of Series T natural resources GOs with a TIC of 2.9943%. No pricing information was immediately available. And Robert W. Baird won the $10 million of Series 2015B taxable higher education GOs with a TIC of 2.3540%. No pricing information was immediately available.
Previously, Ohio competitively sold common school refunding GOs on Jan. 7, when Wells Fargo Securities won $72.4 million of Series 2015A with a TIC of 2.0699%. Ohio sold natural resources GOs was on June 12, 2012, when FTN Financial Capital Markets won $15.8 million of Series R with a TIC of 1.2726%. And the state sold higher education refunding GOs was on Jan. 7, when PNC Capital Markets won $28.2 million of Series 2015A with a TIC of 2.1132%.
Since 1995, Ohio has issued $12.65 billion of GOs. The largest issuance came in 2002, 2003 and 2004 when the state sold $1.44 billion, $1.45 billion and $1.45 billion, respectively. Ohio sold no bonds at all in either 2011 or 2013.
Also in the competitive arena, the Massachusetts School Building Authority sold $300 million of Series 2015 senior dedicated sales tax bonds.
Citi won the issue with a TIC of 3.6701%. The bonds were priced to yield from 0.17% with a 5% coupon in 2016 to 3.84% with a 4% coupon in 2040; a 2045 term bond was priced as 4s to yield 3.89%. The issue is rated Aa2 by Moody's and AA-plus by S&P and Fitch.
The last time before Tuesday the Massachusetts SBA sold bonds was on Jan. 7, when Bank of America Merrill Lynch won $76.32 million of Series 2015A senior dedicated sales tax refunding bonds with a TIC of 0.1341%.
Clemson University in South Carolina competitively sold two issues of revenue bonds totaling $161.82 million.
Citi won Clemson's $97.43 million of Series 2015 higher education revenue bonds with a TIC of 3.6550%. The bonds were priced to yield from 1.13% with a 5% coupon in 2018 to 3.72% with a 4% coupon in 2035; a 2039 term bond was priced as 4s to yield 3.83% and a 4045 term was priced as 4s to yield 3.89%. The bonds are rated Aa2 by Moody's, AA-minus by S&P and AA by Fitch.
Citi also won Clemson's $64.39 million of Series 2015 athletic facilities revenue bonds with a TIC of 3.7323%. The bonds were priced to yield from 0.40% with a 5% coupon in 2016 to 3.82% with a 4% coupon in 2035; a 2040 term bond was priced as 4s to yield 3.93% and a 2045 term was priced at par to yield 4%. The bonds are rated Aa3 by Moody's.
Clemson last sold bonds competitively on Dec. 9, 2014, when Wells Fargo Securities won $41.24 million of Series 2014 A athletic facilities revenue bonds with a TIC of 3.52%.
And the New Jersey Educational Facilities Authority competitively sold $150 million of Series 2015 D revenue bonds for Princeton University. Bank of America Merrill Lynch won the issue with a TIC of 3.4034%. The bonds were priced as 5s to yield 0.62% in 2017 and 0.95% in 2018; and from 1.39% with a 5% coupon in 2020 to 3.32% with a 4% coupon in 2035; a 2045 term was priced as 4s to yield 3.50%. The issue is rated triple-A by Moody's and S&P.
The last time the N.J. EFA sold bonds competitively was on Jan. 8, 2014, when BAML won $200 million of Series 2014 A revenue bonds for Princeton University with a TIC of 3.7726%
In the negotiated sector, Citi received the written award on the Austin Community College District, Texas, Public Facility Corp.'s $105.58 million of Series 2015 lease revenue refunding bonds for the Round Rock Campus. The bonds were priced to yield from 0.08% with a 1% coupon in 2015 to 3.53% with a 5% coupon and 3.93% with a 3.75% coupon in a 2033 split maturity. The issue is rated Aa2 by Moody's and AA by S&P.
Goldman, Sachs is slated to price the Florida Mid-Bay Bridge Authority's $279 million of tax-exempt and taxable first senior lien revenue bonds and tax-exempt second senior lien revenue bonds. The first senior lien bonds are rated BBB-plus by Moody's and S&P and the second senior lien bonds are rated BBB by Moody's and S&P.
Goldman is also expected to price the Los Angeles Community College District's $310 million of GOs for retail investors; the institutional pricing is slated for Wednesday. The bonds are rated Aa1 by Moody's and AA-plus by S&P.
Secondary Market
The yield on the 10-year benchmark muni general obligation on Monday was up as much as two basis points from 2.16% on Monday, while the yield on the 30-year GO rose from two to four basis points from 3.09%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were lower on Tuesday as the yield on the two-year Treasury note increased to 0.62% from 0.60% on Monday, while the 10-year yield rose to 2.19% from 2.13% and the 30-year yield was up to 2.92% from 2.86%.
The 10-year muni to Treasury ratio was calculated on Monday at 101.3% versus 102.2% on Friday, while the 30-year muni to Treasury ratio stood at 107.9% compared to 108.9%, according to MMD.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $84.8 million to $12.963 billion on Tuesday. The total is comprised of $5.151 billion competitive sales and $7.812 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 41,242 trades on Monday on volume of $9.438 billion. The most active bond, based on the number of trades, was the Massachusetts Series B consolidated loan of 2015 general obligation 4s of 2038, which traded 167 times at an average price of 102.173 with an average yield of 3.509%. The bonds were initially priced at 102.265 to yield 3.67%.
