Goldman Sachs as senior manager opened the first of a two-day retail order period for the Hudson Yards Infrastructure Corp., N.Y.’s $2.15 billion of tax-exempt Fiscal 2017 Series A second indenture revenue bonds.
A second round of retail orders will be taken on Monday ahead of the institutional pricing on Tuesday.
Municipal bonds were unchanged at midday as the market looks ahead to next week’s new issue calendar.
Ipreo estimates volume for next week at $7.02 billion, down from a revised total of $8.42 billion sold this week, according to updated figures from Thomson Reuters.
Next week’s calendar is composed of $5.59 billion of negotiated deals and $1.43 billion of competitive sales.
The HYIC bonds were priced for retail to yield from 1.31% with 3% and 5% coupons in a split 2022 maturity to approximately 3.568% with a 3.5% coupon in 2038; a 2042 maturity was prices as 5s to yield 3.19% while a 2045 maturity was priced as 4s to yield 3.53%.
No retail orders were taken in the 2031, 2033-2035, 2039, 2041, 2044 or 2047 maturities.
Next Tuesday, the HYIC’s $33.36 billion of taxable Fiscal 2017 Series B bonds will go out for competitive bid.
The deals are rated Aa3 by Moody’s Investors Service, A-plus by S&P Global Ratings and Fitch Ratings.
Just ahead of Friday’s pricing, S&P upgraded its rating on the HYIC’s outstanding Fiscal 2012 Series A first-indenture senior revenue bonds by two notches to AA-minus from A. S&P also assigned its A-plus rating to the current offering.
Public Resources Advisory Group is the financial advisor on the offerings.
The yield on the 10-year benchmark muni general obligation was steady from 2.02% on Thursday, while the 30-year GO yield was flat from 2.87%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were narrowly mixed on Friday. The yield on the two-year Treasury was unchanged from 1.27% on Thursday as the 10-year Treasury yield gained to 2.25% from 2.23% while the yield on the 30-year Treasury bond increased to 2.91% from 2.90%.
The 10-year muni to Treasury ratio was calculated at 90.0% on Thursday, compared with 91.1% on Wednesday, while the 30-year muni to Treasury ratio stood at 98.7%, versus 99.3%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 42,203 trades on Thursday on volume of $13.68 billion.
Week's actively traded issues
Some of the most actively traded bonds by type in the week ended May 19 were from California, Louisiana and New York issuers, according to Markit.
In the GO bond sector, the Los Angeles Unified School District, Calif., 5s of 2027 were traded 58 times. In the revenue bond sector, the New Orleans Aviation Board, La., 5s of 2048 were traded 68 times. And in the taxable bond sector, the New York State Dormitory Authority 3.998s of 2039 were traded 32 times.
Week's actively quoted issues
Puerto Rico, New York and Illinois names were among the most actively quoted bonds in the week ended May 19, according to Markit.
On the bid side, the Puerto Rico Aqueduct and Sewer Authority revenue 5.25s of 2042 were quoted by 86 unique dealers. On the ask side, the New York Metropolitan Transportation Authority revenue 3.125s of 2033 were quoted by 154 unique dealers. And among two-sided quotes, the Illinois taxable 6.63s of 2035 were quoted by 24 unique dealers.
Week’s primary market
Morgan Stanley priced the Los Angeles Unified School District’s $1.08 billion of Series 2017A dedicated unlimited ad valorem property tax general obligation refunding bonds. The deal is rated Aa2 by Moody’s Investors Service and AAA by Fitch Ratings.
Wells Fargo Securities priced the Dormitory Authority of the State of New York’s $680.95 million of tax-exempt and taxable revenue bonds for New York University. The deal is rated Aa2 by Moody’s and AA-minus by S&P Global Ratings.
Siebert Cisneros Shank priced the District of Columbia’s $565.71 million of Series 2017A GO refunding bonds. The bonds are rated Aa1 by Moody’s Investors Service and AA by S&P Global Ratings and Fitch Ratings. Moody’s and Fitch maintain a stable outlook on the credit while S&P has a positive outlook on D.C.’s bonds.
Citigroup priced the Oregon Department of Transportation’s $336.24 million of highway user tax revenue bonds. The deal is rated Aa1 by Moody’s, AAA by S&P and AA-plus by Fitch.
Bank of America Merrill Lynch priced the city of Charlotte, N.C.’s $305.8 million of airport revenue bonds for the Charlotte Douglas International Airport. The bonds are rated Aa3 by Moody’s and AA-minus by Fitch.
Barclays Capital priced the California Health Facilities Financing Authority’s $275.67 million of Series 2017A revenue bonds for the Children's Hospital of Los Angeles. The deal is rated Baa2 by Moody’s and BBB-plus by S&P.
RBC Capital Markets priced the North Carolina Housing Finance Agency’s $255.56 million of homeownership revenue refunding bonds. The deal is rated Aa2 by Moody’s and AA by S&P.
RBC priced the Frisco Independent School District, Texas’ $206.45 million of Series 2017 unlimited tax school building and refunding bonds. The deal, which is backed by the Permanent School Fund guarantee program, is rated triple-A by Moody’s and S&P.
Citigroup priced the Tennessee Housing Development Agency’s $175 million of residential finance program bonds. The deal is rated Aa1 by Moody’s and AA-plus by S&P.
Barclays priced the Connecticut Health and Educational Facilities Authority’s $170.92 million of Series 2017A revenue bonds for Yale University. The deal is rated triple-A by Moody’s and S&P.
Citigroup priced the South Dakota Housing Development Authority’s $165.61 million of homeownership mortgage bonds. The deal is rated triple-A by Moody’s and S&P.
RBC Capital Markets priced the Colorado Education and Cultural Facilities Authority’s $119.45 million of Series 2017A tax-exempt revenue bonds for the University of Denver. The deal is rated A1 by Moody’s and AA-minus by Fitch.
Goldman Sachs priced the Massachusetts Development Finance Agency’s $103.24 million of revenue bonds for Williams College. The deal is rated Aa1 by Moody’s and AA-plus by S&P.
In the competitive arena, the Phoenix Civic Improvement Corp. sold $232.27 of bonds in two separate sales. Morgan Stanley won the $216.58 million of Series 2017A subordinate excise tax revenue bonds with a true interest cost of 2.04%. Citi won the $15.69 million of Series 2017C taxable subordinate excise tax revenue bonds with a TIC of 1.94%. The deals are rated Aa2 by Moody’s and AA-plus by S&P and Fitch.
The Tulsa Public Facilities Authority, Okla., sold $115.3 million of Series 2017 capital improvement revenue bonds. Mesirow Financial won the deal with a true interest cost of 2.64%. The deal is rated AA-minus by S&P.
Bond Buyer 30-day visible supply
The Bond Buyer's 30-day visible supply calendar increased $875.8 million to $12.70 billion on Friday. The total is comprised of $4.23 billion of competitive sales and $8.48 billion of negotiated deals.
Lipper: Muni bond funds see inflows
Investors in municipal bond funds continued to put cash back into the funds in the latest week, according to Lipper data released late on Thursday.
The weekly reporters saw $426.721 million of inflows in the week ended May 10, after inflows of $605.731 million in the previous week.
The four-week moving average was still in the green at positive $326.188 million, after being positive at $292.065 million in the previous week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.
Long-term muni bond funds also had inflows, gaining $280.582 million in the latest week after rising $355.772 million in the previous week. Intermediate-term funds had inflows of $5.202 million after inflows of $104.229 million in the prior week.
National funds had inflows of $443.455 million after inflows of $635.116 million in the previous week. High-yield muni funds reported inflows of $214.464 million in the latest reporting week, after inflows of $179.829 million the previous week.
Exchange traded funds saw inflows of $98.138 million, after inflows of $30.237 million in the previous week.