Top-quality municipal bonds ended weaker on Tuesday, according to traders, as the first of the week’s new supply lit up their screens, led by a big DASNY deal.

Primary market
Morgan Stanley priced the Dormitory Authority of the State of New York’s $1.75 billion of Series 2017A general purpose state personal income tax revenue bonds for retail investors.

The issue was priced to yield from 0.97% with a 2% coupon in 2019 to approximately 3.345% with a 3.25% coupon in 2040. The 2018 maturity was offered as a sealed bid.

The DASNY deal, which is set to be priced for institutions on Wednesday, is rated Aa1 by Moody’s Investors Service and AAA by S&P Global Ratings.

In the competitive arena on Tuesday, the state of Utah sold $142.07 million of Series 2017 general obligation bonds.

JPMorgan Securities won the bonds with a true interest cost of 1.79%. The issue was priced to yield from 0.84% with a 5% coupon in 2018 to 2.95% with a 3% coupon in 2032.

The deal is rated triple-A by Moody’s, S&P and Fitch Ratings.

Richmond, Va., sold $226.73 million of GOs in two separate offerings.

Wells Fargo Securities won the $182.8 million of Series 2017B GO public improvement and refunding bonds with a TIC of 2.46%. The issue was priced to yield from 0.87% with a 5% coupon in 2018 to approximately 3.262% with a 3.125% coupon in 2037.

Raymond James won the $43.93 million of Series 2017C taxable public improvement refunding bonds with a TIC of 2.82%.

The deals are rated Aa2 by Moody’s and AA-plus by S&P and Fitch.

The New York City Municipal Water Finance Authority sold $164 million of Fiscal 2018 Series AA water and sewer system second general resolution revenue bonds.

Bank of America Merrill Lynch won the bonds with a TIC of 3.58%.

The $70 million of Block 1 bonds were priced as 5s to yield 2.78% in 2037; the $30 million of Block 2 bonds were priced as 3s to yield approximately 3.136% in 2037; the $50 million of Block 4 bonds were priced as 5s to yield 2.80% in 2038; and the $14 million of Block 5 bonds were priced as 4s to yield 3.10% in 2038.

The deal is rated Aa1 by Moody’s and AA-plus by S&P and Fitch.

The city of Los Angeles, Calif., sold $169.41 million of general obligation bonds in two separate offerings.

Citigroup won the $86.59 million of Series 2017A taxable GOs with a TIC of 3.07% while Wells Fargo Securities won the $82.82 million of Series 2017B tax-exempt refunding GOs with a TIC of 1.41%.

The deals are rated Aa2 by Moody’s, AA by S&P and AA-minis by Fitch Ratings.

Also on Tuesday, Wells Fargo Securities priced the Missouri Health and Educational Facilities Authority’s $375 million of taxable educational facilities revenue bonds for Washington University.

The issue was priced as a 2057 bullet maturity to yield about 90 basis points above the comparable Treasury 3% security of 2047.

The deal is rated Aa1 by Moody’s and AA-plus by S&P.

Since 2007 the authority has sold roughly $8.52 billion of securities, with the highest issuance in 2008 when it sold nearly $2 billion. The issuance was lowest in 2007 when it sold $255 million.

Secondary market
The yield on the 10-year benchmark muni general obligation rose three basis points to 1.88% from 1.85% on Monday, while the 30-year GO yield increased three basis points to 2.70% from 2.67%, according to the final read of Municipal Market Data's triple-A scale.

Treasuries were weaker on Tuesday. The yield on the two-year Treasury rose to 1.37% from 1.33% on Monday, the 10-year Treasury yield gained to 2.20% from 2.14% and the yield on the 30-year Treasury bond increased to 2.74% from 2.70%.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 38,367 trades on Monday on volume of $7.26 billion.

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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.
Aaron Weitzman

Aaron Weitzman

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