Munis Steady as Green Bond Deals Price

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Prices of top-quality municipal bonds were steady at mid-session, as two green bond offerings came to market as well as a competitive sale from the Nutmeg State.

Primary Market

Leading off the negotiated slate was the $743.29 million sales tax improvement green bond sale from Sound Transit, the Central Puget Sound Regional Transit Authority, Wash.

JPMorgan priced the Series 2015S-1 green bonds as 5s to yield 1.00% in 2018, from 2.32% in 2024 to 2.72% in 2027 and from 2.89% in 2029 to 3.24% in 2036. A 2045 term bond was priced as 5s to yield 3.43% and a term split maturity bond in 2050 was priced as 4s to yield 4.05% and as 5s to yield 3.58%.

The issue was rated Aa2 by Moody's Investors Service and triple-A by Standard & Poor's.

Citigroup priced the New York State Environmental Facilities Corp.'s $368.24 million of Series 2015D tax-exempt state revolving funds revenue bonds, Green Bonds under the 2010 Master Financing Program.

The issue was priced to yield from 0.81% with a 5% coupon and 0.92% with a 3% coupon in a split 2018 maturity to 3.50% with a 3.25% coupon in 2037. The 2016 and 2017 split maturities were offered as sealed bids. The bonds were rated triple-A by Moody's, S&P and Fitch Ratings.

Since 1995, the NYS EFC has issued roughly $16.3 billion of debt. The years of 2002 and 2004 saw the most issuance with $2.62 billion and $1.32 billion, respectively. The NYS EFC saw low years of issuance in 1995 and 1999, when they sold $240 million and $205 million, respectively.

Wells Fargo Securities priced the Philadelphia Gas Works' $263.64 million of 13th Series 1998 general ordinance revenue refunding bonds. The issue was priced to yield from 1.07% with a 4% coupon in 2017 to 3.84% with a 5% coupon in 2034; a 2016 maturity was offered as a sealed bid. The bonds were rated Baa1 by Moody's, A-minus by S&P and BBB-plus by Fitch.

In the competitive arena, the state of Connecticut sold two separate issues of general obligation bonds totaling $500 million.

Wells Fargo Securities won the Nutmeg State's $250 million of Series 2015E tax-exempt GOs with a true interest cost of 3.17%. The issue was priced as 5s to yield from 0.28% in 2016 to 1.32% in 2019; and from 2.64% with a 5% coupon in in 2025 to 3.75% with a 4% coupon in 2035.

Raymond James won the state's $250 million of Series 2015B taxable GOs with a TIC of 2.73%. No pricing information was immediately available.

Both sales were rated Aa3 by Moody's and AA by S&P and Fitch.

The last time the state competitively sold comparable bonds was on Aug. 6, 2014, when JPMorgan won $300 million of Series 2014E GOs with a TIC of 3.03%.

Secondary Market

The yield on the 10-year benchmark muni general obligation was steady from 2.19% on Monday, while the yield on the 30-year GO was flat from 3.10%, according to a read of Municipal Market Data's triple-A scale.

Treasury prices were lower on Tuesday, with the yield on the two-year Treasury note rising to 0.68% from 0.66% on Monday, while the 10-year yield rose to 2.17% from 2.15% and the 30-year yield increased to 2.87% from 2.85%.

The 10-year muni to Treasury ratio was calculated on Monday at 102.0% versus 99.5% on Friday, while the 30-year muni to Treasury ratio stood at 108.5% compared to 106.8%, according to MMD.

MSRB Previous Session's Activity

The Municipal Securities Rulemaking Board reported 35,714 trades on Monday on volume of $5.810 billion. The most active bond, based on the number of trades, was the New York City Fiscal 2016 Series A GO 5s of 20265, which traded 176 times at an average price of 108.582, an average yield of 2.845%. The bonds were initially priced at 97.352 to yield 4.41%.

Bond Buyer Visible Supply

The Bond Buyer's 30-day visible supply calendar was up $1.20 billion to $10.86 billion on Tuesday. The total is comprised of $3.58 billion competitive sales and $7.29 billion of negotiated deals.

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