Two New York issuers dominated the municipal bond market on Tuesday, bringing over $2 billion of new supply.
The Dormitory Authority of the State of New York sold about $1.3 billion of bonds in five competitive sales.
Bank of America Merrill Lynch won DASNY’s $377.69 million of bidding group 4’s Series 2018A state sales tax revenue bonds with a true interest cost of 3.9763%.
BAML also won the $364.81 million of bidding group 2’s Series 2018A state sales tax revenue bonds with a TIC of 3.5235%.
And BAML won the $349.09 million of bidding group 3’s Series 2018A state sales tax revenue bonds with a TIC of 3.9906%.
Goldman Sachs won the $171.31 million of bidding group 1’s Series 2018A state sales tax revenue bonds with a TIC of 2.4015%.
Wells Fargo Securities won the $66.71 million of the Series 2018B taxable state sales tax revenue bonds with a TIC of 2.6029%.
DASNY is one of the biggest municipal bond issuers in the United States. Since 2008, it has sold over $60 billion of bonds, with the most issuance occurring in 2015 when it offered $9.09 billion of securities. The lowest amount it issued prior to this year was in 2013 when it sold $3.02 billion of bonds.
Also on Tuesday, underwriters held a second day of retail orders for the New York City Transitional Finance Authority’s $1 billion of building aid revenue bonds.
On Monday, Jefferies priced the TFA’s tax-exempt fixed-rate bonds into a supply starved environment with sources saying that $712 million of retail orders were placed on the first day. The institutional pricing is scheduled for Wednesday with the TFA also competitively selling $73 million of taxable fixed-rate bonds.
And buyside demand resurfaced in a big way on the second day of the retail order period, a Dallas underwriter said.
Investors made a second appearance and there was continued demand for the deal.
“There is good demand and buyers are not holding on to their money in fear of something else going on in the market,” he said. He added there was a lot of “chatter” about the deal Tuesday and the pre-market yields were “not too conservative, but more conservative than usual.”
“Given the positive reception on the retail side, and depending on the reception on the institutional side, there is a good chance they may bump the levels” in the institutional pricing on Wednesday, the trader added.
He said the TFA sale will be the deal of the week as it is considered a benchmark by the market given its size, name recognition and market frequency. “It’s New York and everyone has their eyes open when they come to market,” he said.
Tuesday’s bond sales
NYC TFA BARBs:
Click here for the Day 2 retail pricing
Click here for the $377.69M sale
Bond Buyer 30-day visible supply at $8.41B
The Bond Buyer's 30-day visible supply calendar decreased $1.64 billion to $8.41 billion on Thursday. The total is comprised of $3.46 billion of competitive sales and $4.95 billion of negotiated deals.
Previous session's activity
The Municipal Securities Rulemaking Board reported 38,340 trades on Monday on volume of $9.24 billion.
California, Texas and New York were the states with the most trades, with the Golden State taking 15.229% of the market, Lone Star State taking 14.659%, and the Empire State taking 11.091%.
Treasury sells 30-year bonds, 4-week bills
The Treasury Department Tuesday auctioned $13 billion of 29-year 11-month bonds with a 3% coupon at a 3.109% high yield, a price of 97.883828. The bid-to-cover ratio was 2.38.
Tenders at the high yield were allotted 38.47%. The median yield was 3.075%. The low yield was 3.010%.
Treasury also auctioned $65 billion of four-week bills at a 1.650% high yield, a price of 99.871667. The coupon equivalent was 1.675%. The bid-to-cover ratio was 2.58.
Tenders at the high rate were allotted 75.88%. The median rate was 1.600%. The low rate was 1.530%.
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.