The Chicago Public Schools confirmed on Wednesday that its $875 million bond deal has been pulled and placed on the day-today calendar.
The Chicago Board of Education has seen rating downgrades, state takeover talk and a cash crunch as of late.
Standard & Poor's recently cut the CPS two notches to B-plus while Fitch Ratings chopped its rating by three, also to B-plus. The schools got their highest marks from Kroll Bond Ratings Agency, which gave the BoE a grade of triple-B.
JPMorgan on Tuesday had released a preliminary scale marketing the bonds, which are backed by dedicated revenues, and had been expected to offer the preliminary pricing on Wednesday.
Under Tuesday's premarketing scale, the Series 2016A tax-exempt GOs were offered as 7 1/2s to yield 7.70% in 2036, as 7 1/4s to yield 7.75% in 2041 and as 7s to yield 7.75% in 2044. The $79.49 million of Series 2016B taxables were tentatively structured as a 2033 bullet.
Primary Market
In the competitive arena on Wednesday, the Massachusetts Clean Water Trust sold $211.44 million of Series 19 state revolving fund green bonds.
Bank of America Merrill Lynch won the issue with a true interest cost of 2.66%. The bonds were priced to yield from 0.41% with a 5% coupon in 2017 to 3.06% with a 4% in 2040; a 2046 term bond was priced as 4s to yield 3.20%. The issue was rated triple-A by Moody's Investors Service, S&P and Fitch.
Siebert Brandford Shank & Co. priced Kansas City, Mo.'s $183.68 million of Series 2016A sanitary sewer system improvement and refunding revenue bonds.
The issue was priced to yield from 0.50% with a 2% coupon in 2017 to 3.12% with a 4% coupon in 2036; a 2040 split maturity was priced as 3 3/8s to yield 3.48% and as 4s to yield 3.36%; a 2017 maturity was offered as a sealed bid.
The bonds were rated Aa2 by Moody's and AA by S&P.
Citi is expected to price Katy Independent School District, Texas' $228.11 million of unlimited tax school building bonds. The deal is backed by the Permanent School Fund guarantee program and is rated triple-A by both Moody's and S&P.
Morgan Stanley is scheduled to price the successor agency to the redevelopment agency of the city of Pittsburg, Calif.'s $204.59 million for the Los Medanos Community Development Project.
On Thursday, JPMorgan is set to price the Connecticut Health and Educational Facilities Authority's $250 million of revenue bonds for Yale University in a remarketing of two- and five-year put bonds. The issue is rated triple-A by Moody's and S&P.
Waco, Texas, will competitively sell two issues totaling $104.31 million on Thursday. The sales consist of $77.75 million of Series 2016 combination tax and revenue certificates of obligation and $26.56 million of Series 2016 GO refunding bonds. Both issues are rated Aa2 by Moody's and AA-plus by S&P.
Since 2005, the city of Waco has sold about $560 million of bonds, with the most issuance occurring in 2007 and 2015 when it offered $147 million and $87 million, respectively. The "Heart of Texas" saw low years of issuance in 2007 and 2001, when the city only issued $7 million and $9.7 million. During the same time frame, Waco has issued an average of 1.2 times a year.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $1.50 billion to $6.79 billion on Wednesday. The total is comprised of $2.25 billion of competitive sales and $4.54 billion of negotiated deals.
Secondary Market
Top-quality municipal bonds were weaker at mid-session, according to traders.
The yield on the 10-year benchmark muni general obligation was as much as one basis point stronger from 1.75% on Wednesday, while the 30-year muni yield was one to three basis points stronger from 2.75%, according to a read of Municipal Market Data's triple-A scale.
Treasuries were weaker. The yield on the two-year Treasury rose to 0.87% from 0.84% on Tuesday, while the 10-year Treasury yield gained to 2.04% from 1.99% and the 30-year Treasury bond yield increased to 2.83% from 2.78%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 87.8% compared to 86.5% on Monday, while the 30-year muni to Treasury ratio stood at 98.9% versus 98.1%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,752 trades on Tuesday on volume of $6.18 billion.
Yvette Shields contributed to this report
