Prices of top-rated municipal bonds finished mixed on Thursday, according to traders, as yields on some maturities were unchanged to as much as one basis point stronger.
In the primary, Barclays Capital priced the Connecticut Health and Educational Facilities Authority's $325 million of Quinnipiac University bonds, Bank of America Merrill Lynch priced the Kentucky Economic Development Finance Authority's $233 million of revenue bonds, and BMO Capital Markets priced the Chicago Park District's $139 million of general obligation bonds.
Barclays priced the Connecticut HEFA's $324.5 million of Series L revenue bonds for Quinnipiac University to yield from 1.25% with a 5% coupon in 2018 to 3.82% with a 5% coupon in 2036. A 2040 term bond was priced as 4 1/4s to yield 4.34% and a 2045 term bond was priced as 5s to yield 4.01%.
The issue was rated A3 by Moody's Investors Service and A-minus by Standard & Poor's, both with stable outlooks.
BMO priced and repriced the Chicago Park District's $138.48 million of GOs in four series.
The $40 million of Series 2015A limited tax GO tax park bonds were priced as 5s to yield 3.43% in 2024 and from 3.71% in 2026 to 4.13% in 2030; a 2035 maturity yields 4.38% and a 2040 maturity yields 4.54%.
The $54.79 million of Series 2015B limited tax GO refunding bonds were priced to yield from 1.39% with a 4% coupon to 4.13% with a 5% coupon in 2030.
The $15.92 million of Series 2015C limited tax GO refunding bonds were priced as 4s to yield 1.78% in 2018 and 2.11% in 2019 and priced as 5s to yield 3.04% in 2022, 3.29% in 2023 and 3.43% in 2024.
The $27.78 million of Series 2015D unlimited tax GO refunding personal property replacement tax alternative revenue source bonds were priced as 4s to yield from 1.31% in 2017 to 2.37% in 2020 and priced as 5s to yield from 3.22% in 2023 to 3.37% in 2024 and to yield from 3.65% in 2026 to 3.99% in 2029.
The issue was well received in the market, according to a source, who reported that yields on some maturities were lowered three basis points in the 2017-2019 maturities and five basis points in the 2040 maturity with the 2022, 2023 and 2026 maturities remaining unchanged. The deal was from 2-1/2 to 5 times oversubscribed, the source added.
Loop Capital Markets and William Blair were co-senior managers. Katten Muchin Rosenman and Charity & Associates were co-bond counsel and Acacia Financial Group and Speer Financial were advising the district.
The deal was rated AA-plus by S&P, AA-minus by Fitch Ratings and AA by Kroll Bond Rating Agency. All three rating agencies have a stable outlook on the credit.
Proceeds will be used to provide new money for capital projects and the refunding will go for savings and pledge restructuring purposes.
Bank of America Merrill Lynch priced the Kentucky Economic Development Finance Authority's $232.84 million of senior revenue bonds for the Next Generation Kentucky Information Highway project.
The issue was priced to yield from 2.08% with a 2 .50% coupon in 2019 to 4.28% in 2033 with a 5 coupon; a 2035 maturity was priced as 4 1/4s to yield 4.51%, a 2037 maturity was priced as 5s to yield 4.40%, a 2030 maturity was prices as 5s to yield 4.49% and a 2045 maturity was priced as 5s to yield 4.56%.
The deal is rated Baa2 by Moody's and BBB-plus by Fitch.
Bond proceeds will be lent to the concessionaire in the Bluegrass State's first availability payment public-private partnership.
BAML also priced the Indianapolis Local Public Improvement Bond Bank's $176.71 million of Series 2015I refunding bonds subject to the alternative minimum tax for the Indianapolis Airport Authority.
The bonds were priced to yield from 2.68% with a 5% coupon in 2023 to 3.74% with a 5% coupon in 2033.
The deal is rated A1 by Moody's, and A by both S&P and Fitch; all three rating agencies have stable outlooks.
In the competitive arena, the Pennsylvania Higher Educational Facilities sold $99.44 million of Series AR state system of higher education revenue bonds. Wells Fargo Securities won the issue with a true interest cost of 3.698%.
The bonds were priced to yield from 0.56% with a 5% coupon to 3.95% with a 4% coupon in 2036; a 2038 maturity was priced as 4s to yield about 4.033% and a 2040 maturity was priced as 4s to yield approximately 4.080%.
The issue was rated Aa3 by Moody's and AA-minus by Fitch.
Secondary Market
The yield on the 10-year benchmark muni general obligation was one basis points stronger at 2.16% from 2.15% on Wednesday, while the yield on the 30-year GO was steady at 3.11%, according to the final read of Municipal Market Data's triple-A scale.
Treasury prices were mixed on Thursday, with the yield on the two-year Treasury note rising to 0.68% from 0.66% on Wednesday, while the 10-year yield rose to 2.17% from 2.16% and the 30-year yield decreased to 2.91% from 2.93%.
The 10-year muni to Treasury ratio was calculated on Thursday at 99.7% versus 99.2% on Wednesday, while the 30-year muni to Treasury ratio stood at 107.2% compared to 106.2%, according to MMD.
Tax-Exempt Money Market Funds Post Inflows
Tax-exempt money market funds experienced inflows of $350.7 million, bringing total net assets to $247.46 billion in the period ended Aug. 24, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $833.1 million to $247.11 billion in the previous week.
The average, seven-day simple yield for the 383 weekly reporting tax-exempt funds remained at 0.01% for the 121st straight week.
The total net assets of the 967 weekly reporting taxable money funds rose $20.47 billion to $2.467 trillion in the period ended Aug. 25, after experiencing an inflow of $245.7 million to $2.447 trillion in the prior week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 32nd week in a row.
Overall, the combined total net assets of the 1,350 weekly reporting money funds increased $20.82 billion to $2.715 trillion in the period ended Aug. 18, which followed an outflow of $587.4 million to $2.694 trillion the week before.
Yvette Shields contributed to this column
