Munis Flat as NYC Water Leads New Deals

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Prices on top-shelf municipal bonds finished unchanged on Tuesday, traders said, as a slew of new offerings hit the screens, topped by the institutional pricing of the New York City Municipal Water Finance Authority's $451 million deal.

 

Secondary Market

The yield on the 10-year benchmark muni general obligation remained at 1.96% from Monday, while the yield on 30-year GO was flat at 2.80%, according to the final 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 0.56% from 0.58% on Monday, while the 10-year yield decreased to 1.94% from 1.96% and the 30-year yield was down to 2.54% from 2.55%.

The 10-year muni to Treasury ratio was calculated at 101.6% on Tuesday versus 98.5% on Friday, while the 30-year muni to Treasury ratio stood at 110.2% compared to 109.0%.

 

Primary Market

On Tuesday, Raymond James priced the New York City Municipal Water Finance Authority's $451.38 million of revenue bonds for institutional investors after a pricing for retail investors 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.

JPMorgan priced Philadelphia's $269.75 million of Series 2015A water and wastewater revenue bonds. The bonds were priced as 5s to yield 3.45% in 2040 and 3.50% in 2045. The issue is rated A1 by Moody's, A by S&P and A-plus by Fitch.

Morgan Stanley said it priced "the first ever healthcare-related green bond offering" - the Massachusetts Development Finance Agency's $158.16 million of Series 2015D revenue green bonds for the Boston Medical Center.

Interactive Data has in its database 391 CUSIPS identified as Green Bonds; Boston Medical Center is the only hospital bond issue on file.

The bonds were priced as 5s to yield 4.03% in 2044 and as 4s to yield 4.25% in 2045. The deal is rated Baa2 by Moody's and BBB by S&P.

Morgan Stanley also priced the Kansas Development Finance Authority's $202.54 million of Series 2015G revenue bonds for the National Bio- and Agro Defense Facility. The bonds were priced to yield from 1.15% with 4% and 5% coupons in a 2018 split maturity to 3.37% with a 5% coupon in 2035. The issue is rated Aa3 by Moody's and AA-minus by S&P.

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%. 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.

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