Long-term yields on top-rated municipal bonds continued to hover near all-time lows at mid-session, according to a read of Municipal Market Data's triple-A benchmark scale.
In the primary, the Bank of America Merrill Lynch won the state of Maryland's $1 billion of top-quality general obligation bonds.
Secondary Market
At midday Wednesday, the yield on the 30-year general obligation was as much as one basis point lower after falling into record low territory on Tuesday, according to MMD.
The yield on the 30-year muni fell four basis points on Tuesday to a record low of 2.36%. The previous low for the 30-year was 2.39%, hit on May 17.
The yield on 10-year benchmark muni was steady at mid-session from 1.61% on Tuesday, according to MMD. It stands 14 basis points above its all-time low of 1.47% set in 2012.
U.S. Treasuries were narrowly mixed on Wednesday. The yield on the two-year Treasury was unchanged from 0.78% on Tuesday, while the 10-year Treasury yield slipped to 0.70% from 1.71% and the yield on the 30-year Treasury bond decreased to 2.51% from 2.53%.
On Tuesday, the 10-year muni to Treasury ratio was calculated at 94.0% compared to 94.1% on Monday, while the 30-year muni to Treasury ratio stood at 93.1% versus 94.3%, according to MMD.
MMD's Senior Market Strategist Daniel Berger said the muni market was encouraged by Federal Reserve Board Chair Janet Yellen's Monday comments which it interpreted as possibly pushing off rate hikes until later in the year.
"This meant that the muni market's five-/30-year triple-A GO slope flattened further and hit its 12 month low of +131 basis points," Berger said. "This slope was last at this level in January 2008. However, it is unlikely to reach its all-time low of +41 basis points."
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,404 trades on Tuesday on volume of $10.18 billion.
Primary Market
BAML won Maryland's $1.04 billion of GO State and Local Facilities Loan of 2016, First Series bonds with a true interest cost of 2.17%.
The issue was priced to yield from 0.82% with a 5% coupon in 2019 to 2.69% with a 3% coupon in 2031.
The deal is rated triple-A by Moody's Investors Service, S&P Global Ratings and Fitch Ratings.
Seattle, Wash., sold $164.95 million of Series 2016 drainage and wastewater system improvement and refunding revenue bonds. Morgan Stanley won the bonds with a TIC of 2.92%. Pricing information was not immediately available.
Nassau County, N.Y., sold $141.45 million of Series 2016C general improvement bonds. Citigroup won the issue with a TIC of 3.38%. Pricing information was not immediately available. The deal is rated A2 by Moody's, A-plus by S&P and A Fitch.
Clark County, Nev., competitively sold $108 million of Series 2016 highway revenue refunding bonds. Raymond James won the bonds with a TIC of 1.38%. Pricing information was not immediately available. The issue is rated Aa3 by Moody's and AA-minus by S&P.
And the Fayetteville Public Work Commission, N.C., sold about $111.61 million of Series 2016 revenue bonds. Wells Fargo Securities won the bonds with a TIC of 2.49%. The issue was priced to yield from 0.63% with a 5% coupon in 2017 to approximately 3.072% with a 3% coupon in 2041. The deal is rated Aa2 by Moody's and AA by S&P and Fitch.
In the negotiated sector on Wednesday, Piper Jaffray priced the Pennsylvania Turnpike Commission's $408.11 million of Series 2016 A1 and A2 turnpike revenue bonds.
The $267.33 million of Series A1 bonds were priced to yield from 1.29% with a 3% coupon in 2020 to 2.86% with a 5% coupon in 2036; a 2041 maturity was priced as 5s to yield 2.98% and a 2046 term bond was priced as 5s to yield 3.03%. The $140.78 million of Series A2 variable-rates were priced at par in 2017 and 2018 to yield about 50 and 60 basis points, respectively, over the one-month LIBOR. The deal is rated A1 by Moody's and A-plus by S&P.
Citigroup priced the San Diego County Water Authority's $296.51 million of Series 2016A and B water revenue refunding bonds.
The $98.91 million of Series 2016A tax-exempt green bonds were priced as 5s to yield from 1.97% in 2030 to 2.12% in 2033. The $197.6 million of Series 2016A tax-exempt bonds were priced as 5s to yield 1.65% in 2026 and 1.78% in 2027 and to yield from 2.17% in 2034 to 2.34% in 2038.
The bonds are rated Aa2 by Moody's, triple-A by S&P and AA-plus by Fitch.
On Tuesday, Morgan Stanley priced the SDCWA's $87.69 million of Series 2016S-1 subordinate lien water revenue refunding bonds. The deal was priced as 3s and 5s to yield 1.07% in a split 2021 maturity. That deal was rated Aa3 by Moody's, AA-plus by S&P and AA by Fitch.
Since 2008, the SDCWA has sold about $1.79 billion of debt, with the most issuance occurring in 2008 when it issued $558 million. The SDCWA saw a low year of issuance in 2015, when it came to market with $185 million. The authority did not sell bonds in 2009, 2010, 2012 or 2014.
Citi priced the Board of Regents of the University of Texas System's $213.19 million of Series 2016D revenue financing system bonds.
The issue was priced to yield from 0.65% with a 2% coupon in 2017 to 1.75% with a 5% coupon in 2026. The deal is rated triple-A by Moody's, S&P and Fitch.
Barclays Capital priced the Lower Colorado River Authority, Texas' $188.39 million of Series 2016 transmission contract refunding revenue bonds for the LCRA Transmission Service Corp. Project.
The issue was priced to yield from 0.71% with a 3% coupon in 2017 to 2.99% with a 4% coupon in 2035; a 2037 maturity was priced as 3s to yield 3.21%, a 2041 maturity was priced as 4s to yield 3.14% and a 2046 maturity was priced as 5s to yield 2.86%. The deal is rated A by S&P and Fitch.
On the short-term negotiated calendar, Piper Jaffray priced the state of Idaho's $500 million of Series 2016 tax anticipation notes. The TANs were priced as 2s to yield 0.72% in 2017. The deal is rated MIG1 by Moody's, SP1-plus by S&P and F1-plus by Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $4.16 billion to $12.91 billion on Wednesday. The total is comprised of $6.39 billion of competitive sales and $6.52 billion of negotiated deals.
