Top-shelf municipal bonds finished stronger on Tuesday, according to traders, as yields on some maturities fell by as much as two basis points.
The yield on the 10-year benchmark muni general obligation fell one basis point to 2.04% from 2.05% on Monday, while the 30-year yield dropped two basis points to 2.98% from 3.00%, according to the final read of Municipal Market Data's triple-A scale.
Treasury yields were mixed on Tuesday. The two-year Treasury yield rose to 0.93% from 0.92% on Monday while the 10-year Treasury yield slipped to 2.24% from 2.25% and the 30-year yield was unchanged from 3.00%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 91.2% from 91.3% on Monday, while the 30-year muni to Treasury ratio stood at 99.3% compared to 99.8%, according to MMD.
Primary Market
Wells Fargo Securities priced the Mississippi Development Bank's $87.22 million of special obligation refunding bonds for the Municipal Energy Agency's power supply refunding project.
The issue was priced to yield from 0.62% with a 4% coupon in 2016 to 3.66% with a 5% coupon in 2035; a 2041 maturity was priced as 4s to yield 4.08%.
The bonds were insured by Assured Guaranty Municipal and rated A2 by Moody's Investors Service and AA by Standard & Poor's.
RBC Capital Markets priced Trenton, N.J.'s $17.1 million of general obligation refunding bonds consisting of general improvement and sewer utility refunding bonds issued under the Municipal Qualified Bond Act.
The issue was priced to yield from 0.72% and 0.92% with 2% coupons in a split 2016 maturity to 4.22% with a 4.125% coupon in 2033.
The deal was insured by Build America Mutual and rated A3 by Moody's and AA by S&P.
RBC also priced the Minnesota Housing Finance Agency's $136.45 million of residential housing finance bonds. The deal was made up of Series 2015E alternative minimum tax bonds and Series 2015 F non-AMT bonds. Pricing information was not available.
The issue was rated Aa1 by Moody's Investors Service and AA-plus by Standard & Poor's.
Since 2005, the MHFA has issued about $4.2 billion of debt. The most issuance took place in 2006 and 2007 when the agency sold $686 million and $587 million, respectively. The MHFA sold the least amount of debt in 2010 and 2011 when it issued just $86 million and $248 million, respectively. Since 2005, it has come to market an average of 8.8 times a year.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $1.08 billion to $7.44 billion on Tuesday. The total is comprised of $3.64 billion competitive sales and $3.80 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,290 trades on Monday on volume of $5.63 billion.
U.S. Virgin Islands' GARVEEs Rated A by S&P
Standard & Poor's assigned an A rating to the Virgin Islands Public Finance Authority's $91.2 million of Series 2015 grant anticipation revenue bonds (GARVEEs), issued for the U.S. Virgin Islands. The outlook is stable.
"The rating reflects our view of structural provisions that allow funds to flow directly from the Federal Highway Administration to trustee-held debt service accounts -- upon semiannual funding authorization requests by the authority -- before flowing to other purposes, as well as a significant historical precedent that demonstrates a federal commitment and Congressional approval for federal aid for highway programs and specific funding mechanisms to U.S. territories dating back to 1970, though modifications have been made over time," S&P credit analyst Mary Ellen Wriedt said in a press release.
The bonds are being issued to finance construction of transportation projects on St. Thomas and St. Croix. This is the only GARVEE issuance for VIPFA in 2015.
In February, S&P revised the outlook on VIPA to stable from positive and affirmed its triple-B long-term senior note rating and triple-B-minus subordinated note rating.
In June, Fitch Ratings affirmed VIPA's $765.8 million of outstanding Virgin Islands gross receipts tax loan note/senior lien bonds at BBB and kept its outlook at negative.
In 2014, Virgin Islands issuance rose 95.8% to $351 million. Most of that supply came from the VIPA, which issued $247.5 million of Series 2014C bonds last November.
