Traders’ eyes on Wednesday will be riveted on the largest deal of the week — a $1 billion restructuring bond sale coming from the Long Island Power Authority.
The New York bonds will be priced Bank of America Merrill Lynch for retail investors through the Utility Debt Securitization Authority.
The deal, which is rated triple-A by Moody’s Investors Service, Standard & Poor’s and Fitch Ratings, is expected to be priced for institutions on Thursday.
Since 1998, LIPA has issued roughly $15.77 billion of debt. The years of 1998 and 2006 saw the most issuance with $6.73 billion and $2.52 billion, respectively. The power authority did not come to market in 1999, 2002, 2005 or 2007. In 2013, LIPA did not come to market, but its conduit issuer UDSA sold $2.1 billion in refunding bonds.
BAML is also expected to price Hawaii’s $747 million of Series 2015 general obligation bonds, Series ET, EU, EV, EW, EX, EY, EZ and FA; the EU series are green bonds. A retail order period will take place on Wednesday, with the institutional pricing set for Thursday. The deal is rated Aa2 by Moody’s and AA by S&P and Fitch.
Piper Jaffray is set to price the Texas Public Finance Authority’s $370 million of Series 2015C GO and refunding taxable bonds. The deal is rated triple-A by Moody’s and S&P.
In the competitive arena on Wednesday, the Washington Suburban Sanitary District, Md., is offering $390 million of consolidated public improvement bonds of 2015. The deal is rated triple-A by Moody’s S&P and Fitch.
Also, the state of Nevada is offering $344.88 million of GOs in five separate sales, the largest of which is a $256.3 million offering of Series 2015D limited tax GO capital improvement and refunding bonds. All bonds are rated Aa2 by Moody’s, AA by S&P and AA-plus by Fitch.
Also coming on Wednesday is the South Dakota Health and Education Facilities Authority’s Series 2015 revenue bond sale for Sanford Health. The deal, which is being priced by Cain Brothers, is rated A1 by Moody’s and A-plus by S&P.
Secondary Trading
Treasury prices were higher on Wednesday, with the yield on the two-year Treasury dropping to 0.58% from 0.62% from Tuesday, while the 10-year yield fell to 2.01% from 2.05% and the 30-year yield decreased to 2.85% from 2.90%.
On Tuesday, muni prices finished higher. The yield on the 10-year benchmark muni general obligation was one basis point weaker at 2.04% from 2.05% on Friday, while the yield on the 30-year GO was one basis point weaker at 3.09% from 3.10%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Tuesday at 99.3% versus 97.8% on Friday, while the 30-year muni to Treasury ratio stood at 106.7% compared to 105.9%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 41,201 trades on Tuesday on volume of $5.21 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $203.7 million to $10.88 billion on Tuesday. The total is comprised of $3.94 billion competitive sales and $6.94 billion of negotiated deals.
