Municipal bond traders are seeing several big transportation deals hit the screens early on Wednesday.
Up first, JPMorgan Securities priced the North Texas Tollway Authority’s $993.24 million of Series 2016A system first-tier revenue refunding bonds.
The issue was priced as 5s to yield from 0.81% in 2018 to 2.88% in 2036; a 2039 maturity was priced as 4s to yield 3.23% while a 2039 term bond was priced as 5s to yield 2.98%. A 2017 maturity was offered as a sealed bid.
The deal is rated A1 by Moody’s Investors Service and A by Standard & Poor’s. Both rating agencies give the credit a stable outlook.
Net present value savings are expected to come to $125 million or 12.5%, according to a presentation to the NTTA board.
Batting second, Citigroup priced the New York State Thruway Authority’s $850 million of Series 2016A general revenue junior indebtedness obligations.
The issue was priced to yield from 1.13% with a 3% coupon in 2021 to 3.19% with a 4% coupon in 2038; a 2041 maturity was priced as 5s to yield 2.98% and a 2046 term was priced as 5s to yield 3.02%. The deal is rated A3 by Moody’s and A-minus by S&P.
Proceeds of the sale are being used to fund part of the Tappan Zee Bridge replacement project, as well as various other expenses.
And on deck in the competitive arena, the Virginia Transportation Board will sell $275.99 million of Series 2016 transportation capital projects revenue bonds on Wednesday. The deal is rated Aa1 by Moody’s and AA-plus by S&P and Fitch.
The VTB last sold comparable bonds competitively on Nov. 19, 2014, when JPMorgan won $274.98 million of Series 2014 capital projects revenue bonds with a true interest cost of 3.38%.
Also on Wednesday, Ziegler is expected to price the Illinois Finance Authority’s $484.94 million of Series 2016 revenue bonds for the Mercy Health Corp. The deal is rated A3 by Moody’s.
On Thursday, Ramirez is slated to price the Port Authority of New York and New Jersey’s $475 million of 195th series of consolidated bonds. The deal, which is subject to the alternative minimum tax, is rated Aa3 by Moody’s and expected to be rated AA-minus by S&P and Fitch.
Since 2006, Port Authority has issued $23.2 billion of debt, with over $2 billion of bonds sold in 2007, 2010, 2012, 2014 and 2015. The smallest issuance year was 2008, when the authority sold $1.6 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $1.32 billion to $13.30 billion on Wednesday. The total is comprised of $5.66 billion of competitive sales and $7.64 billion of negotiated deals.
Secondary Market
U.S. Treasuries were narrowly mixed on Wednesday. The yield on the two-year Treasury was unchanged from 0.75% on Monday, while the 10-year Treasury yield slipped to 1.79% from 1.80% and the yield on the 30-year Treasury bond decreased to 2.65% from 2.66%.
Top-rated municipal bonds finished stronger on Tuesday. The yield on the 10-year benchmark muni general obligation dropped four basis points to 1.58% from 1.62% on Monday while the 30-year muni yield fell four basis points to 2.54% from 2.58%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 87.9% on Tuesday compared with 86.9% on Monday, while the 30-year muni to Treasury ratio stood at 95.5% versus 95.0%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 41,763 trades on Tuesday on volume of $10.58 billion.
Richard Williamson contributed to this report
