Golden State supply: California's $2.2B GO deal priced for retail buyers

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Municipal bond buyers feasted Tuesday on a big serving of California bonds that were offered up to retail investors.

Morgan Stanley priced California’s $2.19 billion of general obligation various purpose and refunding bonds for retail investors ahead of the institutional pricing on Wednesday.

The deal is rated Aa3 by Moody’s Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings.

Bank of America Merrill Lynch is set to price the Oklahoma Development Finance Authority’s $1.2 billion of health system revenue and taxable bonds for the Oklahoma University Medicine Project.

The deal is rated Baa3 by Moody’s and BB-plus by S&P, but portions of the deal are expected to be insured by Assured Guaranty Municipal Corp., and will be rated AA by S&P.

Since 2008, the Oklahoma DFA has issued $3.68 billion of securities, with the most before this year occurring in 2015 when it sold $464 million and the least in 2013 when it sold $80.1 million.
Wells Fargo Securities priced the Clear Creek Independent School District, Texas’ $155.22 million of Series 2018 unlimited tax school building bonds.

The deal, backed by the Permanent School Fund guarantee program, is rated triple-A by Moody’s and Fitch.

BOK Financial Securities priced the Lake Travis Independent School District, Texas’s $108.74 million of Series 2018A unlimited tax school building bonds. The deal is backed by PSF and rated AAA by S&P and Fitch.

In the competitive arena, Washington state sold $604.36 million of GOs in two sales.

Morgan Stanley won the $491.95 million of various purpose GOs with a true interest cost of 3.6018%.

Morgan Stanley also won the $112.41 million of motor vehicle fuel tax GOs with a TIC of 3.6092%.

Both deals are rated Aa1 by Moody’s, AA-plus by S&P and Fitch.

Ohio sold $300 million of higher education GOs. JPMorgan Securities won the bonds with a TIC of 3.4512%. The deal is rated Aa1 by Moody's and AA-plus by S&P and Fitch.

Citigroup won Hamilton County, Tenn.’s $170.95 million of GOs with a TIC of 2.6584%. The deal is rated triple-A by Moody’s, S&P and Fitch.

Links to Tuesday’s bond sales

California bonds:

Hamilton County, Tenn., bonds:

Clear Creek Independent School District, Texas, bonds:

Ohio bonds:

Lake Travis ISD, Texas, bonds:

Bond Buyer 30-day visible supply at $11.47B
The Bond Buyer's 30-day visible supply calendar increased $532.2 million to $11.47 billion on Tuesday. The total is comprised of $4.92 billion of competitive sales and $6.55 billion of negotiated deals.

Previous session's activity
The Municipal Securities Rulemaking Board reported 42,088 trades on Monday on volume of $9.08 billion.

California, New York and Texas were the states with the most trades, with the Golden State taking 14.804% of the market, the Empire State taking 13.251% and the Lone Star State taking 9.97%.

Treasury sells $65B 4-week bills
The Treasury Department Tuesday auctioned $65 billion of four-week bills at a 1.550% high yield, a price of 99.879444. The coupon equivalent was 1.573%. The bid-to-cover ratio was 3.01.

Tenders at the high rate were allotted 35.02%. The median rate was 1.520%. The low rate was 1.490%.

Gary Siegel contributed to this report.

Data appearing in this article from Municipal Bond Information Services, including the 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 212-803-8474 for more information.

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