Top shelf municipal bonds finished mixed on Tuesday, traders said, as several large competitive offerings from Hawaii and Maryland issuers were sold and a big Connecticut deal was priced for retail investors.
In Washington, D.C., the Federal Open Market Committee began its two-day monetary policy meeting with an announcement on interest rates set for Wednesday afternoon.
Primary Market
Ramirez & Co. priced Connecticut's $550 million of general obligation bonds for retail investors on Tuesday ahead of the institutional pricing on Wednesday.
The issue was priced for retail to yield from 1.14% with 2%, 3% and 4% coupons in a triple split 2019 maturity to 3.46% with a 4% coupon in half of a split 2036 maturity. No retail orders were taken in the 2028, 2032-32, 2034-35 maturities or in second half of the 2036 split maturity. The 2017-18 maturities were offered as sealed bids.
The deal is rated Aa3 by Moody's Investors Service and AA by S&P, Fitch and Kroll Bond Rating Agency.
The state of Hawaii sold two separate competitive offerings on Tuesday totaling $525 million.
Bank of America Merrill Lynch won the $500 million of Series 2016 FB tax-exempt general obligation bonds with a true interest cost of 2.81%. The issue was priced to yield from 1.03% with a 5% coupon in 2019 to 3.20% with a 3% coupon in 2036.
Morgan Stanley won the $25 million of Series 2016 FC taxable GOs with a TIC of 1.53%. Pricing information was not available.
It was the first time in more than 25 years that the Aloha State sold a competitive bond issue. Both sales are rated Aa2 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings.
Howard County, Md., sold three separate GO deals totaling a $124.3 million on Tuesday.
BAML won the biggest part – $97.51 million of Series 2016A tax-exempt GO consolidated public improvement project and refunding bonds with a TIC of 3.47%. The issue was priced to yield from 0.50% with a 5% coupon in 2017 to approximately 3.102% with a 3% coupon in 2036.
A trader said the deal was well received and was reasonably priced.
Morgan Stanley won the $25.05 million tax-exempt sale with a TIC of 3.05% while Raymond James won the $1.76 million taxable deal with a TIC of 1.92%. All three issues are rated triple-A by Moody's, S&P and Fitch.
Since 2006, the county has sold about $1.7 billion of bonds, with the largest issuances in 2007 and 2011 when it offered $248 million and $379 million, respectively. The county's lowest issuance came in 2006 and 2012, when it sold just $100 million and $57 million, respectively.
BAML priced the Lancaster County, Pa., Hospital Authority's $173.31 million of revenue and refunding bonds for the University of Pennsylvania Health System on Tuesday.
The issue was priced to yield from 0.43% with a 5% coupon in 2016 to 3.11% with a 5% coupon in 2036; a 2042 maturity was priced as 5s to yield 3.25%. The deal is rated Aa3 by Moody's and AA-minus by S&P.
Jefferies priced Wisconsin's $120.92 million of Series 2016 1 clean water revenue refunding bonds. The issue was priced to yield from 1.25% with a 5% coupon in 2021 to 2.41% with a 5% coupon in 2031. The deal is rated Aa1 by Moody's and AA-plus by S&P and Fitch.
JPMorgan Securities priced Halifax Hospital Medical Center in Daytona Beach, Fla.'s Series 2016 hospital revenue refunding and improvement bonds. The issue was priced to yield from 0.90% with a 3% coupon in 2017 to 3.52% with a 3.375% coupon in 2031; a 2036 maturity was priced as 5s to yield 3.48%, a 2041 maturity was priced as 3 3/4s to yield 4%, and a 2046 maturity was priced as 4s to yield 4.05%. The bonds are rated A-minus by S&P and triple-B-plus by Fitch.
On Wednesday, Robert W. Baird & Co. is expected to price Winston-Salem, N.C.'s $129.74 million of Series 2016A water and sewer system revenue refunding bonds and Series 2016B taxable water and sewer system revenue refunding bonds on Wednesday. The city sold a total of $67.93 million of GOs and taxable GOs in four competitive sales on Tuesday.
Secondary Market
The yield on the 10-year benchmark muni general obligation rose one basis point to 1.90% from 1.89% on Monday, while the 30-year muni yield fell one basis point to 2.84% from 2.85%, according to the final read of Municipal Market Data's triple-A scale.
U.S. Treasuries were unchanged on Tuesday. The yield on the two-year Treasury was unchanged from 0.96% on Monday, while the 10-year Treasury yield was steady at 1.96% and the 30-year Treasury bond yield held at 2.72%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 97.0% compared to 96.4% on Monday, while the 30-year muni to Treasury ratio stood at 104.4% versus 104.3%, according to MMD.
