NEW YORK – The municipal market was flat to slightly firmer Wednesday, amid light to moderate secondary trading activity, as the New York City Transitional Finance Authority came to market with $900 million of taxable and tax-exempt debt.
“There’s not a lot of activity out there, pretty light trading for the most part,” a trader in New York said. “With that said, we’re feeling a bit better. We’re probably up a basis point or two once you go about 10 years and out. Inside of that, we’re fairly flat.”
In the new-issue market Wednesday, Citi priced $761.5 million of taxable debt for the New York City TFA, including $614.4 million of taxable Build America Bonds.
The BABs mature from 2020 through 2024, with term bonds in 2030 and 2037. Yields range from 4.137% in 2020, or 2.69% after the 35% federal subsidy, to 5.508% in 2037, or 3.58% after the subsidy, all priced at par.
The bonds were priced to yield between 120 and 193 basis points over the 10- and 30-year Treasury yields, and contain a make-whole call at Treasuries plus 40 basis points.
The deal also contained a $147.1 million series of taxable qualified school construction bonds, which mature in 2027, yielding 5.008% priced at par.
The bonds were priced to yield 95 basis points over the 30-year Treasury yield, and contain a make-whole call at Treasuries plus 40 basis points.
The New York City TFA also came to market with $138.5 million of tax-exempt debt Wednesday, priced by Citi.
The bonds mature from 2012 through 2019, with term bonds in 2025 and 2026. Yields range from 0.55% with a 3% coupon in 2012 to 3.66% with a 4% coupon in 2026. The bonds are callable at par in 2020.
The credit is rated Aa1 by Moody’s Investors Service and AAA by both Standard & Poor’s and Fitch Ratings.
Barclays Capital priced $410.3 million of private activity bonds for Colorado’s Regional Transportation District.
The bonds mature from 2019 through 2024, with term bonds in 2026, 2030, 2034, and 2041. Yields range from 4.85% with a 5.25% coupon in 2019 to 6.20% with a 6% coupon in 2041.
The bonds, which are callable at par in 2020, are rated Baa3 by Moody’s and BBB-minus by Fitch.
The Treasury market showed some losses Wednesday. The benchmark 10-year note was quoted recently at 2.96% after opening at 2.90%. The 30-year bond was quoted recently at 4.09% after opening at 4.05%. The two-year note was quoted recently at 0.57% after opening at 0.53%.
The Municipal Market Data triple-A scale yielded 2.57% in 10 years and 3.64% in 20 years Wednesday, following levels of 2.57% and 3.65% Tuesday. The scale yielded 3.96% in 30 years Wednesday, compared to 3.96% Tuesday.
Wednesday’s triple-A muni scale in 10 years was at 87.1% of comparable Treasuries and 30-year munis were at 97.3%, according to MMD, while 30-year tax-exempt triple-A general obligation bonds were at 105.3% of the comparable London Interbank Offered Rate.
Elsewhere in the new-issue market Wednesday, Siebert Brandford Shank & Co. priced $259.8 million of revenue bonds for the Massachusetts Port Authority in three series.
Bonds from the $97.9 million Series A mature from 2013 through 2030, with term bonds in 2034 and 2040. Yields range from 0.86% with a 4% coupon in 2013 to 4.39% with a 5% coupon in 2040. The bonds are callable at par in 2020.
Bonds from the $138.0 million Series B mature from 2011 through 2030, with term bonds in 2034 and 2040. Yields range from 0.55% with a 3% coupon in 2012 to 4.39% with a 5% coupon in 2040. Bonds maturing in 2010 were not formally re-offered. The bonds are callable at par in 2020.
Bonds from the $23.9 million Series C, which is subject to the alternative minimum tax, mature from 2011 through 2018, with yields ranging from 1.09% with a 3% coupon in 2012 to 3.41% with a 5% coupon in 2018. Bonds maturing in 2010 were not formally re-offered. The bonds a are not callable.
The credit is rated Aa3 by Moody’s, AA-minus by Standard & Poor’s, and AA by Fitch.
Morgan Stanley priced $175 million of second series revenue bonds for the San Francisco Airport Commission in two series.
Bonds form the $92.5 million Series A mature in 2029, yielding 4.90% priced at par. The bonds are callable at par in 2019.
Bonds from the $82.5 million Series B mature in 2029, yielding 4.90% priced at par. The bonds are callable at par in 2019.
The credit is rated A1 by Moody’s, A by Standard & Poor’s, and A-plus by Fitch.
In economic data released Wednesday, the Institute for Supply Management's non-manufacturing business activity composite index was 54.3 in July, up from 53.8 in June, on a seasonally adjusted basis.
Economists polled by Thomson Reuters had expected a 53.0 level.
Visible Supply
The Bond Buyer’s 30-day visible supply fell $485.1 million to $7.291 billion. The total is comprised of $1.283 billion of competitive bonds and $6.008 billion of negotiated bonds.
Previous Session's Activity
The Municipal Securities Rulemaking Board reported 44,249 trades of 14,966 issues for volume of $12.22 billion. Most active was taxable Clark County, Nev., BABs 6.15s of 2030 that traded 186 times at a high of 101.098 and a low of 99.875.
