The municipal bond market will see the $1.4 billion tax and revenue anticipation note sale from the city of Los Angles come to market on Wednesday along with the institutional pricing of the $937 million Massachusetts offering.
Secondary Market
Treasury prices were mixed on Wednesday with the yield on the two-year Treasury note rising to 0.69% from 0.67% on Tuesday, while the 10-year yield was flat from 2.39% and the 30-year yield decreased to 3.17% from 3.20%.
Prices of top-shelf municipal bonds finished weaker on Tuesday. The yield on the 10-year benchmark muni general obligation finished up three basis points to 2.32% from 2.29% on Monday, while the yield on the 30-year GO was up two basis points to 3.30% from 3.28%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Tuesday at 96.4% versus 97.0% on Monday, while the 30-year muni to Treasury ratio stood at 103.2% compared to 104.1%, according to MMD.
Primary Market
Stifel is set to price the city of Los Angeles' $1.39 billion of Series 2015 TRANs. Proceeds of the sale will be used to smooth cash flow and make pension payments before July 15, generating about $36.4 million in savings from a pre-payment discount.
"We think this will get good reception," LA Chief Administrative Officer Miguel Santana told The Bond Buyer last week. "Last year, we got 11 basis points [on the MIG1 one-year scale] and we hope to be competitive this year. We are a safe bet and think there will be a lot of interest."
The TRANs are rated MIG1 by Moody's Investors Service and SP1-plus by Standard & Poor's. JP Morgan and Ramirez are co-managers on the deal with and Omnicap Group serving as the financial advisor.
Bank of America Merrill Lynch is set to price Massachusetts' $936.755 million of GO consolidated loan of 2015, Series C refunding bonds and Series 2015A bonds for institutions on Wednesday.
The $686.75 million Series 2015A GO refunding bonds were priced for retail in Tuesday to yield from 2.07% with a 3% coupon in 2022 to 2.22% with a 5% coupon in 2023. The bonds were also priced to yield from 2.54% with a 5% coupon in 2025 to 3.85% with a 3.75% coupon in 2037. No retail orders were taken in the 2028-2031 and 2034-2046 maturities. The 2016 and 2017 maturities were offered as sealed bids. The $250 million Series C consolidated loan of 2015 GOs were priced as 5s to yield 1.07% in 2018, 2.07% in 2022 and 2.40% in 2024; a 2045 term bond was priced at par to yield 4.00%. No retail orders were taken in the 2031, 2031 or 2040 maturities.
The MMD spread for Massachusetts GOs has been 10 basis points over the benchmark for five-years, 17 basis points over the benchmark for 10-years, and 19 basis points over the benchmark for 15-years and out, Daniel Berger, MMD Senior Market Strategist, wrote in a Tuesday comment.
The deal is rated Aa1 by Moody's and AA-plus by both S&P and Fitch Ratings.
Siebert Brandford Shank is set to price Miami-Dade County, Fla.'s $222.89 million of Series 2015A public facilities revenue and refunding bonds for the Jackson Health System.
The bonds were priced for retail on Tuesday to yield from 1.03% with a 4% coupon in 2017 to 2.85% with a 5% in 2024 and to yield from 3.15% with a 5% coupon in 2026 to 4.07% with a 4% coupon in 2034. There were no retail orders taken in the 2027, 2029, 2032 or 2033 or 2035 to 2037 maturities; a 2016 maturity was offered as a sealed bid. The issue was rated Aa2 by Moody's, A-plus by S&P and AA-minus by Fitch.
BAML is expected to price FirstEnergy Nuclear Generation Corp.'s $296 million of pollution control revenue refunding bonds on Wednesday. The bonds are rated Baa3 by Moody's and BBB-minus by S&P.
BAML is also slated to price the Maryland Health and Higher Educational Facilities Authority's $263 million of Series 2015 revenue bonds for the Meritus Medical Center. The deal will have a retail order period on Wednesday. The bonds are rated BBB by S&P and Fitch.
Stifel is expected to price the Industry Public Facilities Authority, Calif.'s $250 million of Series 2015B taxable tax allocation refunding bonds for the Industrial Redevelopment Project No. 2 on Thursday, The deal is rated A-minus by S&P.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 40,431 trades on Tuesday on volume of $7.628 billion.
The most active bond, based on the number of trades, was the Illinois Series A of 2009 GO 5s of 2030, which traded 128 times at an average price of 102.076 with an average yield of 4.294%. The bonds were initially priced at 105.146.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $2.172 billion to $9.87 billion on Wednesday. The total is comprised of $2.10 billion competitive sales and $7.87 billion of negotiated deals.
