The long-awaited bond deal for the American Dream mall project in the New Jersey Meadowlands came to market Wednesday and New York City Transitional Finance Authority’s offering was priced for institutional investors, as municipal bonds finished unchanged, according to traders.
Goldman Sachs priced the Wisconsin’s Public Finance Authority’s $1.09 billion revenue bond deal, which the PFA issued on behalf of the New Jersey Sports & Exposition Authority.
Market sources indicated that the deal was oversubscribed by about 1.5 times.
“The deal went quit well, people came in for it and it was oversubscribed,” said a New York trader. “There is so much need for high-yield paper, it was an opportune time to bring the deal.”
The $800 million of Series 2017 tax-exempt limited obligation PILOT revenue bonds were priced at par to yield 5% in 2027 with a projected average life of 4.2 years and an expected final turbo redemption date in 2023; as 6 1/2s to yield 6.25% in 2037 with a projected average life of 11.2 years and an expected final turbo redemption date in 2030; as 6 3/4s to yield 6.375% in 2042 with a projected average life of 14.6 years and an expected final turbo redemption date in 2033; and as 7s to yield 6.625% in 2050 with a projected average life of 19.9 years and an expected final turbo redemption date in 2039.
The 2027 maturity was priced to yield 314 basis points over the comparable maturity in Municipal Market Data’s triple-A scale while the 2037 maturity was priced 369 basis points over the comparable MMD maturity, 374 basis points basis points over the comparable MMD security in 2042, and 393 basis points over the 30-year MMD maturity.
Goldman also priced the PFA’s $287 million of Series 2017A and B limited obligation grant revenue bonds.
The $268.4 million of tax-exempt Series 2017A bonds were priced to yield about 6.385% with a 6.25% coupon in 2027 with a projected average life of 4.3 years and an expected final turbo redemption date in 2023; and to yield approximately 6.861% with a 6.75% coupon in 2031 with a projected average life of 7.0 years and an expected final turbo redemption date in 2025.
The $18.6 million of taxable Series 2017B bonds were priced at par to yield 5.625% in 2024 with a projected average life of 3.1 years and an expected final turbo redemption date in 2020.
The deal is not rated.
Loop Capital markets priced the New York City Transitional Finance Authority’s $850 million of tax-exempt Fiscal 2017 Series F Subseries F-1 future tax secured subordinate bonds for institutions after holding a two-day retail order period.
The bonds were priced to yield from 0.99% with a 3% coupon in 2019 to 2.91% with a 5% coupon in 2039 and from 2.94% with a 5% coupon in 2042 to 3.27% with a 4% coupon in 2044.
The issue is rated Aa1 by Moody’s Investors Service and AAA by S&P Global Ratings and Fitch Ratings.
The TFA also competitively sold $250 million of taxables in two separate offerings Wednesday.
The $189.14 million of taxable subordinate Fiscal 2017 Series F Subseries F-2 future tax secured bonds were won by JPMorgan Securities with a true interest cost of 2.81%. The $60.86 million of taxable subordinate Fiscal 2017 Series F Subseries F-3 future tax secured bonds were also won by JPMorgan with a TIC of 3.21%. Pricing information on the deals was not available.
The bonds are also rated Aa1 by Moody’s and AAA by S&P and Fitch.
Also in the competitive sector, the Rhode Island Health and Educational Building Corp. sold $140.81 million of Series 2017A higher education facilities revenue bonds for Brown University.
Bank of America Merrill Lynch won the bonds with a TIC of 3.25%. The issue was priced as 5s to yield from 1.32% in 2022 to 2.19% in 2029; a 2037 maturity was priced as 4s to yield 3.06% and a 2047 maturity was priced as 4s to yield 3.28%.
The deal is rated Aa1 by Moody’s and AA-plus by S&P.
Since 2007 the HEBC has issued roughly $3.52 billion of securities, with the largest amount occurring in 2016, when it sold $587 million. The lowest yearly issuance took place in 2014, when it issued just $68 million.
In the negotiated sector, Morgan Stanley priced the California Health Facilities Authority’s $436.4 million of revenue bonds for Sutter Health.
The bonds were priced to yield from 2.19% with a 5% coupon in 2027 to 3.31% with a 5% coupon in 2038. A split 2048 term bond was priced to yield 3.65% with a 4% coupon and 3.25% with a 5% coupon.
The deal is rated Aa3 by Moody’s and AA-minus by S&P and Fitch.
BAML priced the Port of Oakland, Calif.’s $254.43 million of intermediate lien refunding revenue bonds.
The $96.05 million of Series 2017D private activity bonds subject to the alternative minimum tax were priced as 5s to yield from 1.24% in 2019 to 2.65% in 2029.
The $89.31 million of Series 2017E governmental non-AMT bonds were priced as 5s to yield from 0.98% in 2018 to 2.44% in 2029.
The $30.72 million of Series 2017F non-AMT private activity bonds were priced as 5s to yield 0.98% in 2018 and 1.13% in 2019.
The $38.36 million of Series 2017G taxable bonds were priced at par to yield from 1.65% in 2018 to 3.30% in 2029.
The deal is rated A2 by Moody’s and A by S&P and Fitch.
The yield on the 10-year benchmark muni general obligation was unchanged from 1.86% on Tuesday, while the 30-year GO yield was flat from 2.70%, according to the final read of Municipal Market Data's triple-A scale.
Treasuries were mixed on Wednesday. The yield on the two-year Treasury rose to 1.35% from 1.34% on Tuesday, the 10-year Treasury yield was unchanged from 2.15% and the yield on the 30-year Treasury bond decreased to 2.72% from 2.73%.
The 10-year muni to Treasury ratio was calculated at 86.3% on Wednesday, compared with 86.5% on Tuesday, while the 30-year muni to Treasury ratio stood at 99.2% versus 96.7%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 42,851 trades on Tuesday on volume of $9.45 billion.