Muni Yields Rise; NYC MWFA Priced for Institutions

Prices on top-quality municipal bonds were weaker at mid-session, traders said, with yields on some maturities up by as much as one basis point.

In the primary market, the New York City Municipal Water Finance Authority deal was priced for institutions and issuers in Utah, Florida and Washington state sold bonds competitively.

Secondary Market

The yield on the 10-year benchmark muni general obligation was up by as much as one basis point from 1.96% on Monday, while the yield on 30-year GO was up as much as one basis point from 2.80%, according to a read of Municipal Market Data's triple-A scale.

Treasury prices were higher on Tuesday. The yield on the two-year Treasury note declined to 0.55% from 0.58% on Monday, while the 10-year yield decreased to 1.93% from 1.96% and the 30-year yield was down to 2.54% from 2.55%.

On Monday, the 10-year muni to Treasury ratio was calculated at 98.5% versus 100.8% on Friday, while the 30-year muni to Treasury ratio stood at 109.0% compared to 111.0%.

Primary Market

On Tuesday, Raymond James priced the New York City Municipal Water Finance Authority's $447.77 million of revenue bonds for institutional investors after a retail pricing on Monday.

The Fiscal 2015 Series GG second general resolution water and sewer system revenue bonds were priced to yield from 2.20% with a 5% coupon in 2025 to 3.23% with a 3.125% coupon and 2.96% with a 5% coupon in a 2032 split maturity; a 2037 maturity was priced as 5s to yield 3.13%; a 2038 maturity was priced as 4s to yield 3.48%; and a 2039 split maturity was priced as 5s to yield 3.16% and 3.06%.

At Monday's retail pricing, the bonds were priced to yield from 2.20% with a 5% coupon in 2025 to 3.23% with a 3.125% coupon in 2032; a 2038 maturity was priced as 4s to yield 3.48%. No retail orders were taken in the 2037 or 2039 maturities.

The issue is rated Aa2 by Moody's Investors Service and AA-plus by Standard & Poor's and Fitch Ratings.

The state of Utah competitively sold $223.59 million of Series 2015 unlimited tax general obligation refunding bonds. JPMorgan won the bonds with a true interest cost of 1.9479%. No other pricing information was immediately available. The bonds are rated triple-A by Moody's, S&P and Fitch.

Utah last sold bonds competitively on July 11, 2013, when Morgan Stanley won $226 million of Series 2013 GOs with a true interest cost of 2.8711%.

Since 1995, Utah has sold $6.752 billion of GOs, with the largest issuance coming in in 2009 and 2001 when the state issued $1.481 billion and $1.207 billion, respectively. The years of lightest issuance were in 2000, 2005, 2006, and 2008 when no bonds were sold.

Bellevue, Wash., competitively sold $96.2 million of limited tax GO and refunding bonds. Morgan Stanley won the bonds with a TIC of 2.8398% No other pricing information was immediately available. The issue is rated Aa1 by Moody's and triple-A by S&P.

Bellevue last sold bonds competitively on April 16, 2013, when US Bancorp won $70 million of Series 2013 limited tax GOs with a TIC of 2.6843%.

The Orlando Utilities Commission competitively sold $94.91 million of Series 2015A utility system revenue bonds. JPMorgan won the issue with a TIC of 3.5681%. No other pricing information was immediately available. The bonds are rated Aa2 by Moody's and AA by S&P and Fitch.

The OUC sold bonds in a negotiated transaction on Nov. 20, 2013, when Jeffries priced $243 million of Series 2013 utility system revenue refunding bonds. The commission has about $1.44 billion of utility system revenue and revenue refunding bonds outstanding.

Bond Buyer Visible Supply

The Bond Buyer's 30-day visible supply calendar increased $309.9 million to $11.603 billion on Tuesday. The total is comprised of $3.221 billion competitive sales and $8.382 billion of negotiated deals.

MSRB Previous Session's Activity

The Municipal Securities Rulemaking Board reported 34,162 trades on Monday on volume of $6.530 billion. Most active, based on the number of trades, was the Kentucky Municipal Power Agency's Series 2015A Prairie State project power system revenue refunding 4s of 2039, which traded 148 times at an average price of 99.951 with an average yield of 3.982%; (initial offering price of 97.858, an initial offering yield of 4.14%).

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