Municipal bonds were little changed at Tuesday's close, according to traders, with some yields on top-quality munis lower by a basis point.
The market saw steady action with some notable larger deals pricing, though what was supposed to be the biggest deal of the week – a $1.75 billion revenue bond offering from All Aboard Florida -- is delayed.
Due to Veterans Day on Wednesday, there will be no bonds sold or traded. The action will pick up back again on Thursday.
Primary Market
AAF's planned 235-mile intercity express train from Miami to Orlando received a private activity bond allocation from the U.S. Department of Transportation. The project continues to fight state and federal legal challenges brought by Martin and Indian River counties where the train will pass through but not stop. The deal was not rated and the plan was to sell to qualified institutional buyers and accredited investors.
Elsewhere, the primary market was packed with action on Tuesday.
JPMorgan priced the Central Texas Regional Mobility's $371.07 million of senior lien revenue and refunding put bonds. The $302.035 million of senior lien revenue bonds, series 2015A were priced as 5s to yield from 2.95% in 2025 to 3.90% in 2035. Term bonds in 2040 and 2045 were priced as 5s to yield 4.07% and 4.13%, respectively.
The $69.035 million of senior lien revenue and refunding put bonds, series 2015B, were priced in a 2045 bullet maturity as 5s to yield 2.14%. The bond has a mandatory put date of Jan. 6, 2021. The deal is rated Baa2 by Moody's and BBB-plus by S&P.
BAML priced the school board of Miami-Dade Counties' $343.92 million of certificates of participation. The COPs are priced to yield from 1.69% with a 5% coupon in 2020 to 3.70% with a 5% coupon in 2034. The deal is rated A1 by Moody's and A-minus by S&P.
In the competitive arena on Tuesday, Bank of America Merrill Lynch won the Washington, Md., suburban sanitation department's $150.67 million of consolidated public improvement refunding bonds, with a true interest cost of 2.15%. The bonds were priced to yield from 0.20% with a 2% coupon in 2016 to 0.81% with a 2% coupon in 2018. The bonds were also priced to yield from 1.22% with a 4% coupon in 2019 to 2.88% with a 3% coupon in 2028.The deal is rated triple-A by Moody's, S&P and Fitch Ratings.
The New Jersey Environmental Infrastructure Trust sold three separate issues totaling roughly $140.69 million on Tuesday. Wells Fargo won the largest of the three - $117.475 million of refunding bonds, Series 2015B-R2, which are subject to alternative minimum tax, with a TIC of 1.99%. The bonds were priced as 5s to yield from 0.68% in 2017 to 2.54% in 2027.
PNC Capital Markets won the $13.905 million deal with a TIC of 2.30% and Citi won the $9.31 million deal with a TIC of 2.79%.
JPMorgan priced Kershaw County, S.C., public schools foundation's $102.235 million of installment purchase refunding revenue bonds to yield from 0.70% with a 3% coupon in 2016 to 3.81% with a 3.625% coupon in 2031. The deal is rated A1 by Moody's and A-minus by S&P and the 2026-3031 maturities are insured by Build America Mutual.
The market will be closed on Wednesday in observance of Veterans Day. The primary action will pick back up on Thursday, as the rest of the weeks new issue slate is scheduled to price.
Citi is scheduled to price Springfield, Ill.'s $498 million of senior-lien electric revenue bond sale on Thursday, which will restructure debt for operating relief and generate traditional present value savings. It is anticipated that the deal will mature serially from 2018-2035 and also include a term bond in 2040. Moody's revised its outlook on the city utility's A3 credit to stable from negative and Standard & Poor's affirmed its A rating and stable outlook.
The largest competitive sale on the docket will also take place on Thursday as the California Public Works Board will be selling roughly $223.15 million of lease revenue bonds, for the Department of Corrections and Rehabilitation and California State Prison, Corcoran and various buildings. The jail bonds are rated A1 by Moody's, A-plus by S&P and A by Fitch Ratings.
The Virginia College Building Authority are selling two separate issues totaling roughly $207.33 million. The larger issue is for $154.085 million of educational facilities revenue refunding bonds for the higher education financing program, Series 2015B and the other issue is for $53.245 million of educational facilities revenue bonds, series 2015A. Both deals are rated Aa1 by Moody's, AA by S&P and AA-plus by Fitch.
Since 2006, the Virginia CBA has issued roughly $7.60 billion worth of bonds. The years of 2009 and 2012 saw the most issuance with $1.69 billion and $1.05 billion, respectively. The VCBA saw low years of bond sales in 2008 and 2013, with $144 million and $419 million, respectively.
Secondary Market
On Tuesday, the yield on the 10-year benchmark muni general obligation closed unchanged from 2.19% on Monday, While the 30-year GO was one basis point lower to 3.19% from 3.20%, according to a final read of Municipal Market Data's triple-A scale.
Treasuries were stronger at the market close on Tuesday, as the yield on the two-year Treasury fell to 0.87% from 0.88% on Monday. The 10-year Treasury yield dropped to 2.33% from 2.35% on Monday and the 30-year yield one basis point lower at 3.10% from 3.11%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 94.5% versus 93.2% on Monday, while the 30-year muni to Treasury ratio stood at 103.2% compared to 102.8%, according to MMD.
