Top quality municipal bonds finished mixed on Monday, according to traders, as the first of the week’s big new issues came to market out of the Midwest to be offered to retail buyers.
Action got underway as JPMorgan Securities priced the Ohio Higher Educational Facilities Commission’s $824.23 million of Series 2017A tax-exempt hospital refunding revenue bonds for the Cleveland Clinic Health System Obligated Group for retail investors.
The bonds were priced for retail to yield from 0.96% with a 3% coupon in 2019 to 3.42% with a 5% coupon in 2039. A 2043 term bond was priced as 4s to yield 3.50%.
JPMorgan will price the tax-exempts and the approximately $160 million of Series 2017B taxables for institutions on Tuesday.
The deal is rated Aa2 by Moody’s Investors Service and AA by S&P Global Ratings.
On Tuesday, the New York City Transitional Finance Authority is selling $1.5 billion of fiscal 2018 future tax secured subordinate bonds in six separate competitive offerings.
The sales consist of $411.88 million of Subseries A-3 tax-exempts, $407.21 million of Subseries A-2 tax-exempts, $225.95 million of Subseries A-5 taxables, $180.92 million of Subseries A-1 tax-exempts, $162.12 million of Series 1 bonds (remarketing), and $124.06 million of Subseries A-4 taxables.
The deals are rated Aa1 by Moody’s and AAA by S&P and Fitch Ratings.
The Louisville and Jefferson County Metropolitan Sewer District, Ky., is selling $215.53 of sewer and drainage system revenue and revenue refunding bonds in two separate competitive offerings.
The sales consist of $175 million of Series 2017A revenue bonds and $40.53 million of revenue refunding bonds.
The deals are rated Aa3 by Moody’s and AA by S&P.
The Virginia Public School Authority is competitively selling $103.44 million of Series 2017B school financing refunding bonds (1997 resolution).
The deal is rated Aa1 by Moody’s and AA-plus by S&P and Fitch.
Also coming up on Tuesday, Morgan Stanley is expected to price Philadelphia’s $278.24 million of 15th Series 1198 general ordinance gas works revenue bonds.
The deal is rated A3 by Moody’s, A by S&P, and BB-plus by Fitch.
Roosevelt & Cross is expected to price the city of Yonkers, N.Y.’s $149.61 million of general obligation bonds.
The deal is rated A2 by Moody’s and A by S&P.
Prior week's actively traded issues
Revenue bonds comprised 55.91% of new issuance in the week ended Aug. 4, up from 54.88% in the previous week, according to Markit. General obligation bonds made up 37.36% of total issuance, down from 38.42%, while taxable bonds accounted for 6.73%, up from 6.70%.
Some of the most actively traded bonds by type in the week ended Aug. 4 were from Massachusetts, California and Illinois issuers.
In the GO bond sector, the Massachusetts 2s of 2018 were traded 49 times. In the revenue bond sector, the Bay Area Toll Authority of Calif. 3.25s of 2036 were traded 104 times. And in the taxable bond sector, the Illinois 5.1s of 2033 were traded 24 times.
Previous week's top underwriters
The top negotiated and competitive municipal bond underwriters of last week included Bank of America Merrill Lynch, Wells Fargo, JPMorgan, Morgan Stanley and Citigroup, according to Thomson Reuters data.
In the week of July 30 to Aug. 4, BAML underwrote $2.688 billion, Wells Fargo $1.260 million, JPM $808.9 million, Morgan Stanley $580.3 million, and Citi $338.7 million.
The yield on the 10-year benchmark muni general obligation was unchanged from 1.93% on Friday, while the 30-year GO yield rose one basis point to 2.73% from 2.72%, according to the final read of Municipal Market Data's triple-A scale.
Treasuries were stronger on Monday. The yield on the two-year Treasury dipped to 1.35% from 1.36% on Friday, the 10-year Treasury yield declined to 2.26% from 2.27% and the yield on the 30-year Treasury bond decreased to 2.84% from 2.85%.
The 10-year muni-to-Treasury ratio was calculated at 85.5% on Monday, compared with 85.1% on Friday, while the 30-year muni-to-Treasury ratio stood at 96.2% versus 96.6%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 32,358 trades on Friday on volume of $8.119 billion.