Municipal bonds were unchanged at mid-session in quiet trading, as the bulk of the week's paltry supply was being priced.
Secondary Trading
Traders kept watch on muni yields, which fell sharply on Monday in the wake of financial turmoil in Puerto Rico and Greece.
The yield on the 10-year benchmark muni general obligation was flat from 2.28% on Monday, while the yield on the 30-year GO was unchanged from 3.28% according to a read of Municipal Market Data's triple-A scale.
Treasury prices were higher on Tuesday with the yield on the two-year Treasury note falling to 0.63% from 0.64% on Monday, while the 10-year yield dropped to 2.33% from 2.34% and the 30-year yield decreased to 3.09% from 3.10%.
The 10-year muni to Treasury ratio was calculated on Monday at 98.3% versus 93.4% on Friday, while the 30-year muni to Treasury ratio stood at 106.1% compared to 102.3%, according to MMD.
Puerto Rico GOs Continue to Drop
Prices of Puerto Rico debt continued to move lower on Tuesday, the second day in a row the bonds traded down.
Puerto Rico bonds fell on Monday after a published report quoted Gov. Alejandro García Padilla as saying the commonwealth cannot pay its $72 billion in debt.
On Tuesday, Puerto Rico commonwealth Series 2014A general obligation 8s of 2035 were trading as low as 64.50 cents on the dollar, according to the Municipal Securities Rulemaking Board's EMMA website, a high yield of 13.028%. There were 50 trades totaling $124 million. An earlier trade at a lower price was pulled.
On Monday, the GOs traded as low as 68.30 cents on the dollar, according to EMMA, a high yield of 12.291%. There were 93 trades totaling $141 million.
On Friday, the GOs traded as low as 76.75, according to EMMA, a high yield of 10.874%. There were 19 trades totaling $22 million.
Primary Market
Morgan Stanley priced the Metropolitan Washington Airports Authority's $315.47 million of Series 2015 B and C airport system revenue and refunding bonds.
The $279.27 million of Series 2015B AMT bonds were priced to yield from 1.04% with a 3% coupon in 2017 to 3.79% and 3.61% with 5% coupons in a split 2035 maturity. A 2040 term bond was priced as 5s to yield 3.95% and a 2045 term was priced as 5s to yield 4.03%; the 2015 and 2016 maturities were offered as sealed bids.
The $36.2 million Series 2015C non-AMT bonds were priced to yield from 0.84% with a 3% coupon in 2017 to 3.51% with a 5% coupon in 2035; the 2015 and 2016 maturities were offered as sealed bids.
The issue was rated A1 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings.
Morgan Stanley also priced Arizona's $166.76 million of Series 2015 refunding certificates of participation.
The COPs were priced to yield from 0.97% with a 4% coupon in 2017 to 3.20% with a 5% coupon in 2027; the 2015 and 2016 maturities were offered as sealed bids. The COPs were rated Aa3 by Moody's and AA-minus by S&P.
The North Dakota Public Finance Authority sold $125 million of Series 2015A revolving fund program bonds. JPMorgan won the issue with a true interest cost of 3.33%. Pricing information was not immediately available.
The last time the PFA competitively sold comparable bonds was on April 23, when Citi won $25.62 million of Series 2015B capital financing program bonds with a TIC of 3.33%.
Citi received the official award on the Texas Transportation Commission's $781.08 million of state highway fund first tier revenue refunding bonds. The issue was priced to yield from 0.86% with a 3% coupon in 2017 to 2.71% with a 5% coupon in 2026. The bonds were rated triple-A by Moody's and S&P.
Goldman, Sachs received the written award on the California Municipal Finance Authority's $92.87 million of Series 2015B revenue refunding bonds for the city of Anaheim's electric utility distribution system refunding and improvements. The bonds were priced to yield from 0.40% with a 3% coupon in 2016 to 4.07% with a 4% coupon and 3.60% with a 5% coupon in a split 2035 maturity. The bonds are rated AA-minus by S&P and Fitch.
Jefferies is slated to price the Jets Stadium Finance Issuer 2015, LLC's $147 million of Series 2015 taxable weekly mode variable-rate demand notes on Tuesday. The notes were rated VMIG1 by Moody's and A1 by S&P.
Wells Fargo Securities is set to price Clark County, Nev.'s $102 million of revenue refunding bonds for the Las Vegas-McCarran International Airport on Tuesday. The bonds, initially structured as serials running from 2019 through 2027, were rated A1 by Moody's and A-plus by S&P.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 34,124 trades on Monday on volume of $5.543 billion.
The most active bond, based on the number of trades, was the New York City Transitional Finance Authority's Series 2015 S-2 building and revenue bond 4s of 2044, which traded 97 times at an average price of 100.083 with an average yield of 3.967%. The bonds were initially priced at 99.625 to yield 4.022%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $706.6 million to $7.82 billion on Tuesday. The total is comprised of $3.10 billion competitive sales and $4.72 billion of negotiated deals.
