Municipal bonds held firm as the first of the week’s new issues came to market, led by deals from issuers on the East and West Coasts.

Secondary market
Municipal bonds were mostly stronger on Tuesday, according to a late read of the MBIS benchmark scale. Benchmark muni yields fell as much as one basis point in the two- to eight-year and 13- to 30-year maturities and rose less than a basis point in the one-year and nine- to 12-year maturities.

High-grade munis were also mostly stronger, with yields calculated on MBIS’ AAA scale falling by as much as one basis point in the two- to eight-year and 13- to 30-year maturities and yields rising less than a basis point in the one-year and nine- to 12-year maturities.

Municipals were little changed according to Municipal Market Data’s AAA benchmark scale, which showed the 10-year general obligation muni yield steady and the 30-year muni maturity flat.

Treasury bonds were slightly stronger as stock prices fell.

On Tuesday, the 10-year muni-to-Treasury ratio was calculated at 81.9% while the 30-year muni-to-Treasury ratio stood at 95.1%, according to MMD.

“It seems like even though the Treasury market is weaker, the municipal new issue market is doing very well,” Pete Stare of Hilltop Securities said in an interview Tuesday just before noon.

“We have reinvestment money from the first of June getting into the market, so the cash versus supply is a fairly good ratio,” he said, attributing the pent-up demand to first-quarter scarcity.

“The market in quarter one was hamstrung by the lack of volume, but now with a pick up in supply over the last week to give them guidance, it has gotten buyers’ attention and and they are able to focus,” he said.

Previous session's activity
The Municipal Securities Rulemaking Board reported 36,840 trades on Monday on volume of $9.067 billion.

California, New York and Texas were the states with the most trades, with the Golden State taking 15.111% of the market, the Empire State taking 14.255% and the Lone Star State taking 10.216%.

Primary market
Raymond James & Associates priced the Dormitory Authority of the State of New York’s $585.795 million of Series 2018 A, B, C, D and E school districts financing program revenue bonds for retail investors on Tuesday. The institutional pricing will take place on Wednesday.

The Series A bonds are rated Aa3 by Moody’s Investors Service and AA-minus by Fitch Ratings, with the exception of the 2033-2034, 2038, 2043 and 2047 maturities which are insured by Assured Guaranty Municipal Corp. and rated AA plus by S&P Global Ratings.

The Series B bonds are rated Aa2 by Moody’s and AA-minus by Fitch; the Series C bonds are rated AA by S&P and AA-minus by Fitch; and the Series D bonds are rated Aa1 by Moody’s and AA-minus by Fitch.

The Series E bonds are rated AA by S&P, with the exception of the 2019 maturity which is uninsured and rated Aa3 by Moody’s and AA-minus by Fitch.

In the competitive arena on Tuesday, the City and County of San Francisco sold $382.04 million of general obligation bonds in three sales.

The $189.735 million of Series 2018C 2014 earthquake safety and emergency response GOs were won by Morgan Stanley with a true interest cost of 3.16%. The $142.23 million of Series 2018D taxable 2015 affordable housing GOs were won by Wells Fargo with a TIC of 3.78%. And the $50.075 million of Series 2018E 2016 public health and safety GOs was won by Citi. The deals are rated Aaa by Moody’s and AA-plus by S&P and Fitch.

Since 2008, the city and county of San Francisco has sold about $6.19 billion of securities, with the most issuance occurring in 2017 when it sold $1.04 billion and the least in 2013 when it sold $306 million.

Morgan Stanley priced the California Statewide Communities Development Authority's $158 million of revenue green bonds and taxable revenue bonds for Marin General Hospital. The deal is rated A-minus by S&P and Fitch.

Morgan Stanley also priced Oregon’s $99.985 million of general obligation Series 2018A, B and C tax-exempts.

Tuesday's bond sales

New York:
Click here for the DASNY $586M retail pricing

California:
Click here for the San Fran $189M pricing

Click here for the San Fran $142M pricing

Click here for the San Fran $50M pricing

Click here for the $91M Calif. Statewide CDA green bond pricing

Click here for the $67M Calif. Statewide CDA taxable pricing

Oregon:
Click here for the state pricing

Treasury sells 4-week bills, 3-year notes
The Treasury Department Tuesday auctioned $45 billion of four-week bills at a 1.660% high yield, a price of 99.870889. The coupon equivalent was 1.685%. The bid-to-cover ratio was 3.22.

Tenders at the high rate were allotted 89.10%. The median rate was 1.650%. The low rate was 1.620%.

Treasury also auctioned $31 billion of three-year notes with a 2 5/8% coupon at a 2.664% high yield, a price of 99.888266. The bid-to-cover ratio was 2.76.

Tenders at the high yield were allotted 79.47%. All competitive tenders at lower yields were accepted in full. The median yield was 2.639%. The low yield was 2.510%.

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.

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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.
Christine Albano

Christine Albano

Christine Albano is a reporter in the Investor’s & Investing beat, which she has covered for the past two decades. She has a wide range of buy side sources in the municipal market.