Municipal bonds were steady at midday, according to traders, with yields on top-quality munis unchanged from Monday's close.
The $1.75 billion All Aboard Florida deal, scheduled to be priced Tuesday, has been postponed, according to the underwriters.
Primary Market
The $1.75 billion of revenue bonds for the All Aboard Florida passenger rail project, which was scheduled to be priced Tuesday, has been postponed. According to the syndicate desk at Bank of America Merrill Lynch, no new date has been set. A call to a spokeswoman for All Aboard Florida (AAF) was not returned as of press time. No other details were available. The deal was not rated and the plan was to sell to qualified institutional buyers and accredited investors.
Leading up to Tuesday, there was some doubt surrounding the deal, with reports there was trouble finding buyers, and even some talk of delays.
AAF, a planned 235-mile intercity express train between Miami and Orlando, is owned by Florida East Coast Industries whose parent company is Fortress Investment Group. If completed, the project would be the first privately owned passenger train developed in the U.S.
The project received a private activity bond allocation from the U.S. Department of Transportation, but continues to fight state and federal legal challenges brought by Martin and Indian River counties where the train will pass through but not stop. Both counties have said they will suffer numerous ill effects from the project.
The Florida developers just unveiled the service's new name late Monday. Using its Miami station as a backdrop Monday, All Aboard Florida officials introduced Brightline as the name of the express train.
"With the introduction of Brightline, we set out to reinvent what traveling by train can mean in America, making it a forward-leaning solution that is a smarter alternative to more cars on crowded roads," said AAF President Michael Reininger.
Elsewhere, the primary market was packed with action.
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 totaling roughly $140.69 million on Tuesday. Wells Fargo won the largest of the three issues - $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.
Secondary Market
According to midday read of the muni general obligation scale, yields are still flat from Monday's close.
On Monday, the yield on the 10-year benchmark muni general obligation closed three basis points higher at 2.19% from 2.16% on Friday, while the 30-year GO was also up three basis points to 3.20% from 3.17% on Friday, according to a final read of Municipal Market Data's triple-A scale.
Treasuries were higher at midday, as the yield on the two-year Treasury fell to 0.87% from 0.88% on Monday. The 10-year Treasury yield dropped to 2.32% from 2.35% on Monday and the 30-year yield was two basis points lower at 3.09% from 3.11%.
The 10-year muni to Treasury ratio was calculated on Monday at 93.2% versus 92.7% on Friday, while the 30-year muni to Treasury ratio stood at 102.8% compared to 102.6%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 31,418 trades on Monday on volume of $5.294 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $1.342 billion to $7.65 billion on Monday. The total is comprised of $3.71 billion competitive sales and $3.94 billion of negotiated deals.
Shelly Sigo contributed to this report
