Illinois comes to market with $920M bond deal; Texas sells $7.2B notes

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Illinois came to market on Wednesday with more than $900 million of bonds aimed at shedding the state’s $600 million of floating rate paper and covering the $74 million cost of swaps that synthetically fixed a 2003 issue.

Meanwhile, Texas sold a massive note deal in the competitive arena.

Primary market
JPMorgan Securities priced Illinois’ $920.19 million of Series of September 2018AB GO refunding bonds on Wednesday.

Bank of America Merrill Lynch, Loop Capital Markets, Siebert Cisneros Shank & Co. and PNC Capital Markets serve as co-senior managers. Columbia Capital Management is advisor and Swap Financial Group is swap advisor. Chapman and Cutler and Burke, Burns & Pinelli are bond counsel.

The deal is rated Baa3 by Moody’s Investors Service, BBB-minus by S&P Global Ratings and BBB by Fitch Ratings.

Since 2008, the state has sold about $35 billion of debt, with the most issuance occurring in 2010 when it sold $8.7 billion of bonds. It did not come to market in 2015.
Jefferies priced for retail investors the Triborough Bridge and Tunnel Authority’s $156.395 million of Series 2018C general revenues refunding bonds for the New York Metropolitan Transportation Authority’s bridges and tunnels.

The deal is rated Aa3 by Moody’s, AA-minus by S&P and Fitch and AA by Kroll Bond Rating Agency.

RBC Capital Markets is set to price the Rhode Island Housing and Mortgage Finance Corp.’s $105.375 million of homeownership opportunity bonds, consisting of Series 69A bonds subject to the alternative minimum tax, Series 69B non-AMT bonds and Series 69T taxable bonds after a one-day retail order period.

The bonds are rated Aa1 by Moody’s and AA-plus by S&P

In the short-term sector, Texas sold $7.2 billion of Series 2018 tax and revenue anticipation notes.

The TRANs were won by 11 groups, including UBS Financial Services, Wells Fargo Securities, Piper Jaffray, Morgan Stanley, JPMorgan, RBC, FTN Financial, Goldman Sachs, Citigroup, Barclays Capital and TD Securities.

The financial advisor is George K. Baum and the bond counsel is Orrick Herrington.

The deal is rated MIG1 by Moody’s, SP1-plus by S&P, F1-plus by Fitch and K1-plus by Kroll.

On Thursday, Massachusetts will sell $1.5 billion of general obligation revenue anticipation notes in three sales consisting of $500 million each of Series 2018A, Series 2018B and Series 2018C RANs.

The financial advisor is Public Resources Advisory Group and the bond counsel is Mintz Levin.

The deal is rated MIG1 by Moody’s, SP1-plus by S&P and F1-plus by Fitch.

Wednesday’s bond sales

Illinois
Click here for the preliminary pricing

Click here for the premarketing scale

New York
Click here for the TBTA retail pricing

Rhode Island
Click here for the housing retail pricing

Bond Buyer 30-day visible supply at $9.2B
The Bond Buyer's 30-day visible supply calendar decreased $114.9 million to $9.196 billion for Tuesday. The total is comprised of $3.36 billion of competitive sales and $5.84 billion of negotiated deals.

Secondary market
Municipal bonds were stronger on Wednesday, according to a midday read of the MBIS benchmark scale. Benchmark muni yields fell as much as one basis point in the one- to 30-year maturities.

High-grade munis were mostly stronger, with yields calculated on MBIS’ AAA scale falling as much as one basis point in the one- to seven-year and 11- to 30-year maturities, rising less than a basis point in the nine-year maturity and remaining unchanged in the eight- year and 10-year maturities.

Municipals were steady on Municipal Market Data’s AAA benchmark scale, which showed the yield on both the 10-year muni general obligation and the yield on 30-year muni maturity remaining unchanged.

Treasury bonds were stronger as stock prices turned mixed.

On Tuesday, the 10-year muni-to-Treasury ratio was calculated at 85.8% while the 30-year muni-to-Treasury ratio stood at 99.9%, according to MMD. The muni-to-Treasury ratio compares the yield of tax-exempt municipal bonds with the yield of taxable U.S. Treasury with comparable maturities. If the muni/Treasury ratio is above 100%, munis are yielding more than Treasury; if it is below 100%, munis are yielding less.

Previous session's activity
The Municipal Securities Rulemaking Board reported 40,821 trades on Tuesday on volume of $9.17 billion.

California, New York and Texas were the municipalities with the most trades, with Golden State taking 14.733% of the market, the Empire State taking 13.048% and the Lone Star State taking 10.01%.

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 Ziad Saba at 212-803-6079 for more information.

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