Municipal market participants have their hands full on Tuesday, as roughly half of the week’s issuance is flowing into the primary market. Muni yields were down as much as five basis points in some maturities, according to traders.

California came to market with $1.59 billion of various purpose general obligation bonds in three competitive sales on Tuesday.

The $557.22 million of tax-exempt Bid Group B bonds were won by Wells Fargo with a true interest cost of 1.79%. The $493.215 million of various purpose general refunding bonds were priced to yield from 0.88% with a 5% coupon in 2018 to 1.17% with a 5% coupon in 2021 and from 1.48% with a 5% coupon in a 2023 to 2.07% with a 5% coupon in 2027. The $64 million of VP GO construction bonds were priced to yield from 1.48% with a 5% coupon in 2023 to 1.66% with a 5% coupon in 2024.

The $522.53 million of tax-exempt Bid Group C bonds were won by Morgan Stanley with a TIC of 3.11%. The $387.875 million of VP GO refunding bonds were priced to yield from 2.17% with a 5% coupon in 2028 to 2.31% with a 5% coupon in 2030 and from 2.50% with a 5% coupon in 2033 to 2.92% with a 4% coupon in 2037. The $134.655 million of VP GO construction bonds were priced to yield from 2.17% with a 5% coupon in 2028 to 2.24% with a 5% coupon in 2029 and from 2.37% with a 5% coupon in 2031 to 2.44% with a 5% coupon in 2032.

The $508.57 million of Bid Group A taxable GO bonds were won by JP Morgan with a TIC of 2.16%. No pricing information was immediately available. The deals are rated Aa3 by Moody’s Investors Service, and AA-minus by S&P Global Ratings and Fitch Ratings.

Meanwhile, Illinois is competitively sold $1.5 billion of GOs in three separate sales.

The $500 million Series of November 2017A GOs, were won by Bank of America Merrill Lynch and priced to yield 1.64% with a 5% coupon in a bullet 2018 maturity.

The $500 million of Series of November 2017B GOs were won by JP Morgan, which did not immediately disclose the yield on the 2019 bullet maturity.

The $500 million of Series of November 2017C GOs were won by BAML and priced to yield 3.78% with a 5% coupon in a bullet 2029 maturity. The deals are rated Baa3 by Moody’s, BBB-minus by S&P and BBB by Fitch.

With this week's sales, since 2013, the Golden State has issued $37.6 billion while the Prairie State has issued $10.64 billion of securities. California saw a low year of issuance in 2014 when it sold $6.24 billion and saw a high in 2016 with $8.92 billion, while Illinois did not come to market in 2015 and saw its high the next year, when it sold $3.36 billion.

The Virginia Public School Authority sold $116.01 million of financing 1997 resolution Series 2017C school financing bonds on Tuesday. Bank of America Merrill Lynch won the bidding with a TIC of 2.99%. The bonds were priced to yield from 0.98% with a 2% coupon in 2018 to 3.40% with a 3.25% coupon in 2043. A term bond in 2047 was priced to yield 3.476% with a 3.375% coupon. The deal is rated Aa1 by Moody’s and AA-plus by S&P and Fitch.

In the negotiated sector on Tuesday, Goldman Sachs held a second day of retail orders on the New York City Transitional Finance Authority’s $850 million of Fiscal 2018 Series B Subseries B-1 future tax secured subordinate bonds.

On Tuesday, the bonds were priced for retail at par to yield from 3.00% and 5.00% in a split 2019 maturity to 3.403% with a 3.375% coupon in 2045. No retail orders were taken in the 2031-2033, 2036, 2038-2041, or 2043 maturities.

The first day of retail orders on Monday was priced to yield from 1.01% with 3% and 5% coupons in a split 2019 maturity to approximately 3.40% in 2045. No retail orders were taken in the 2031-2033, 2036, 2038-2041, or 2043 maturities.

On Wednesday, the deal will price for institutions. The TFA will also competitively sell $140 million of taxable Fiscal 2018 Series B Subseries B-2 future tax secured subordinate bonds. The deals are rated Aa1 by Moody’s and AAA by S&P and Fitch.

Secondary market
Top-shelf municipal bonds were stronger around midday on Tuesday. The yield on the 10-year benchmark muni general obligation was between one and three basis points lower from 1.96% from Monday, while the 30-year GO yield was between three and five basis points lower from 2.72%, according to a read of Municipal Market Data's triple-A scale.

U.S. Treasuries were also stronger on Tuesday around midday. The yield on the two-year Treasury dipped to 1.54% from 1.55%, the 10-year Treasury yield dropped to 2.30% from 2.32% and yield on the 30-year Treasury bond decreased to 2.81% from 2.82%.

On Monday, the 10-year muni-to-Treasury ratio was calculated at 84.8% compared with 86.0% on Friday, while the 30-year muni-to-Treasury ratio stood at 96.5% versus 97.2%, according to MMD.

AP-MBIS 10-year muni dips to 2.282%
The Associated Press-MBIS 10-year municipal benchmark 5% general obligation was at 2.282% on Tuesday around noon, little changed from the final read of 2.284% on Monday, according to Municipal Bond Information Services, a national consortium of municipal interdealer brokers.

The AP-MBIS index is a yield curve built on market data aggregated from MBIS member firms and is updated hourly on the Bond Buyer Data Workstation.

Data appearing in this article from Municipal Bond Information Services, including the AP-MBIS municipal bond index, is available on the Bond Buyer Data Workstation. Click here for a brief tour of the Workstation, or contact Vanessa Kim at 212-803-8372 for more information.

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Aaron Weitzman

Aaron Weitzman

Aaron Weitzman is a markets reporter for The Bond Buyer, focusing on the sell side of the municipal bond market.
Chip Barnett

Chip Barnett

Chip Barnett is a journalist with more than 40 years of experience. Barnett is currently Senior Market Reporter for The Bond Buyer.