Top shelf municipal bonds ended steady on Wednesday, as traders saw more of the week's big new issue slate hit the market, led by a Pennsylvania Turnpike deal.
Citigroup priced the Pennsylvania Turnpike Commission's $365.14 million of Series of 2016 turnpike subordinate revenue refunding bonds.
The issue was priced to yield from 0.75% with a 5% coupon in 2017 to 3.34% with a 5% coupon in 2038.
The deal is rated A3 by Moody's Investors Service and A-minus by Fitch Ratings.
Since 2006, the commission has issued bonds an average of six times a year, selling about $13 billion. The largest issuance came in 2009 and 2014, when it offered $2.9 billion and $1.9 billion, respectively. The lows occurred in 2006 and 2007, when it issued $594 million and $532 million, respectively.
The Board of Trustees of the University of Illinois competitively sold $120.53 million of Series 2016A auxiliary facilities system refunding revenue bonds.
Citi won the issue with a true interest cost of 3.47%. The bonds were priced to yield from 0.59% with a 5% coupon in 2017 to 3.52% with a 4% coupon in 2036.
The deal was rated Aa3 by Moody's and AA-minus by S&P.
Bank of America Merrill Lynch priced for retail Columbus, Ohio's $118.95million of Series 2016-1 and Series 2016-2 various purpose general obligation refunding bonds.
The $111.66 million of Series 2016-1 unlimited tax bonds were priced to yield from 0.50% with a 3% coupon in 2017 to 2.48% with a 4% coupon in 2031.
The $7.30 million of Series 2016-2 bonds limited tax bonds were priced to yield from 1.16% with a 3% in 2022 to 1.88% with a 5% coupon in 2027.
The issue is rated triple-A by Moody's Investors Service, Standard & Poor's and Fitch Ratings.
BAML also priced the Connecticut Housing Finance Authority's $145 million of housing mortgage finance program bonds.
The $100.46 million of Series 2016 A-1 non-AMT bonds were priced at par to yield 2.40% in in 2026, at par to yield 2.875% in 2030, at par to yield 3.20% in 2035, at par to yield 3.50% in 2040 and as 4s to yield 1.77% for a 2045 planned amortization class bond. The $44.55 million of Series 2016 A-2 AMT bonds were priced at par to yield from 0.45% in 2016 to 2.70% and 2.75% in a split 2026 maturity.
The issue was rated triple-A by Moody's and S&P.
Raymond James priced the Lamar Consolidated Independent School District, Texas' $114.62 million of Series 2016A unlimited tax refunding bonds.
The issue was priced to yield 1.55% with a 2% coupon in 2024 and to yield from 1.96% with a 5% coupon in 2027 to 3.06% with a 4% in 2038.
The bonds were backed by the Permanent School Fund guarantee program and rated triple-A by Moody's and S&P.
Secondary Market
Top shelf municipal bonds ended steady on Wednesday as Federal Reserve Chair Janet Yellen testified before Congress.
Yellen told the House Financial Services Committee that while the Fed expects to raise interest rates gradually in 2016, market volatility could change its plans for several rate hikes this year.
"Financial conditions in the United States have recently become less supportive of growth," Yellen said. "These developments, if they prove persistent, could weigh on the outlook for economic activity and the labor market."
Municipals shrugged off the news and the yield on the 10-year benchmark muni general obligation finished unchanged from 1.61% on Tuesday, while the 30-year muni yield was flat from 2.68%, according to the final read of Municipal Market Data's triple-A scale.
Treasuries were narrowly mixed on Wednesday. The yield on the two-year Treasury increased to 0.71% from 0.68% on Tuesday, while the 10-year Treasury yield decreased to 1.71% from 1.72% and the 30-year Treasury bond yield fell to 2.53% from 2.55%.
The 10-year muni to Treasury ratio was calculated on Wednesday at 94.5% compared to 93.2% on Tuesday, while the 30-year muni to Treasury ratio stood at 106.0% versus 104.9%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 35,537 trades on Tuesday on volume of $8.44 billion.
