Ahead of a $317 million sale of New York City Housing Development Corp. multi-family housing revenue bonds later this week, JPMorgan priced for retail investors $225 million of the deal's series C-1 fixed-rate bonds.
Yields range from 0.75% priced at par in 2017 to 4.15% priced at par in 2039. Bonds maturing in 2016, 2018, 2034, 2044, and 2047 were not offered to retail.
A trader in Virginia in New York said that he is keeping a close eye on the bonds.
"There are only a few deals out in the market this week, and this is a credit we own," he said. "Its single family, multi-family. We like it. It a offers a little bit of spread over triple-A deals, but is still fairly high quality."
The bonds can be called at par in 2023, except the 2016 maturity has an optional call at par in 2015, the 2017 maturity has an option call in 2016 with a 0.85% coupon, and the 2018 maturities have optional calls in 2016 and 2017.
The 2014 series C-1 Bonds are also subject to optional redemption, special optional redemption and sinking fund redemption prior to maturity.
The priced part of the deal has a five-part sinking fund schedule with term bonds in 2029, 2034, 2039, 2044, and 2047.
The other two parts of the deal include $35.5 million index floating rate federally taxable bonds, and $9.2 million term rate bonds.
The bonds earned an Aa2 from Moody's Investors Service, and AA from Standard & Poor's.
The cash from the sale will be paired with $88.7 million in subordinate financing from the NYC HDC to fund 2,226 units of affordable housing in 16 developments in the Bronx, Brooklyn and Manhattan as part of Mayor Bill de Blasio's Housing New York City plan, according to a press release from the HDC.
The plan intends to create or preserve 200,000 affordable homes over the next decade.
Muni yields held steady in light trading as investors awaited larger deals that will come over the next few days, when the bulk of the weeks's issuance is scheduled.
"It's a summer Monday, the market is pretty painful right now," a trader in New York said.
Georgia is expected to auction a five-part general obligation deal totaling about $978 million on Tuesday, the largest deal of the week.
"With Georgia being a competitive deal, it might push lower coupon structures," a trader based in North Carolina said. "That may be what will drive investors into the Texas deal potentially. I haven't seen Texas' structure yet."
The deal received triple-A ratings from Moody's Investor Services, Standard & Poor's and Fitch Ratings.
The Texas Department of Transportation is scheduled to sell $900 million of triple-A rated GOs and refunding bonds this week as well, a deal that some market participants predict will be priced aggressively.
"There will probably be pretty good reception for both deals depending on price and market conditions," the North Carolina trader said. "It comes down to structure."
A trader in Chicago said he thinks the Texas bonds will be expensive, but does not believe this will be an issue because the reinvestment period has started.
"Buyers have cash from June 1 coupon payments and bonds maturing, and many investors received payments on June 15 too," he said.
Bank of America will bring $900 million of Texas Department of Transportation GO mobility fund and refunding bonds to the market on Wednesday, the largest deal in the negotiated market.
The deal is rated Aaa by Moody's Investor Services, and AAA by both Standard and Poor's and Fitch Ratings.
Citigroup Global Markets will issue $590 million of Oregon tax anticipation notes on Tuesday.
The deal is rated MIG 1 by Moody's, SP-1-plus by S&P and F1-plus by Fitch.
Loop Capital Markets will bring $555 million of Chicago Transit Authority sales tax receipts revenue bonds on Wednesday.
The deal is rated AA by S&P and AA by Kroll Bond Rating Agency.
The Port Authority of New York & New Jersey will sell $400 million of consolidated bonds. The deal is rated Aa3 by Moody's and AA-minus by both S&P and Fitch.
In the competitive market, Georgia is expected to auction a four-part GO deal totaling about $982.7 million on Tuesday, the largest deal of the week.
The deal received a AAA rating from Fitch.
Muni yields were steady across the curve, according to the Municipal Market Data's triple-A scale.
The two-year, 10-year, and 30-year held steady at 0.33%, 2.31%, and 3.52% respectively, according to Municipal Market Advisors' data.
Treasuries were mostly steady Monday.
The 10-year benchmark and the 30-year yields were unchanged at 2.60% and 3.40%, respectively, from Friday's market close.
The two-year note rose two basis point to 0.47%.
