For the second consecutive week the largest scheduled deal has been pulled.
JPMorgan confirmed to The Bond Buyer the $1.2 billion taxable deal from the Florida State Board of Administration scheduled for Thursday has been moved to next week.
No reason was given for the Florida delay. An exact day next week has also yet to be determined, according to the underwriter. This will bring down this week's volume, which was estimated at just $5.37 billion.
Meanwhile, most of the maturities were unchanged, as yields are higher by as many as one basis point in some maturities, according to traders.
Primary Market
The action got started right away as King County, Wash., sold $279.08 million of Series 2016A sewer refunding revenue bonds, with Bank of America Merrill Lynch winning the bid with a true interest cost of 3.27%. The bonds were priced to yield from 0.40% with a 3% coupon in 2016 to 3.22% with a 4% coupon in 2041.The deal is rated Aa2 by Moody's Investors Service and AA-plus by Standard & Poor's.
The county last competitively sold comparable bonds on Oct. 26, 2015, when Bank of America Merrill Lynch won $93.35 million of Series 2015B sewer improvement and refunding revenue bonds with a true interest cost of 3.36%.
On Tuesday, Nassau County, N.Y., will competitively sell $120.14 million of Series 2016B general improvement bonds. The issue is rated A2 by Moody's, A-plus by S&P and A by Fitch. The county last competitively sold comparable bonds on May 20, 2015, when JPMorgan won $168.90 million of Series 2015B general improvement bonds with a TIC of 3.78%.
Piper Jaffray is expected to price San Antonio, Texas' $215.39 million of water system junior lien revenue refunding bonds consisting of Series 2016A and Series 2016B taxable bonds on Tuesday. The deal is rated Aa2 by Moody's and AA by S&P.
The municipal bond market still has an eye on the Chicago Public Schools issue, which was postponed last week.
Last week the Chicago Public Schools postponed its $875 million general obligation bond deal. Chicago Board of Education officials placed the offering on the day-to-day negotiated calendar. But CPS Chief Executive Officer Forrest Claypool said last Thursday the board expects to bring the sale to market early this week.
While CPS has been battered by negative headlines over rating downgrades and a Republican-led effort pushing for state oversight and possible bankruptcy, the district got some positive news that contract talks with the Chicago Teachers Union had broken through a logjam.
Wednesday's postponement decision came as the market awaited the deal following the Tuesday release of a pre-marketing pricing scale that offered rich yield premiums, with spreads of more than 500 basis points from the Municipal Market Data's benchmark. That was 200 basis points higher than the district's sale in April.
Secondary Market
The yield on the 10-year benchmark muni general obligation was one basis point higher to 1.72% from 1.71% on Friday, while the 30-year muni yield was unchanged at 2.75%, according to the final read of Municipal Market Data's triple-A scale, which took into account the February roll conversion.
Treasuries were weaker at Monday's close. The yield on the two-year Treasury rose to 0.81% from 0.77% on Friday, while the 10-year Treasury yield increased to 1.96% from 1.93% and the 30-year Treasury bond yield was higher to 2.78% from 2.75%.
The 10-year muni to Treasury ratio was calculated on Monday at 87.7% compared to 88.7% on Friday, while the 30-year muni to Treasury ratio stood at 99.2% versus 99.8%, according to MMD.
Puerto Rico Releases Restructuring Proposal
The Working Group for the Fiscal and Economic Recovery of Puerto Rico release details of the comprehensive voluntary exchange proposal today, which was presented to advisors to the Commonwealth's creditors last week.
According to the release, the proposal would reduce the commonwealth's mandatorily payable, tax-supported debt from $49.2 billion to $26.5 billion, cap annual debt payments at 15% of government revenues and provide creditors the opportunity to recover the principal amount of their investments by making them partners in the island's future growth.
"Last June, we began to directly address the Commonwealth's fiscal and economic crisis through the development of a comprehensive set of solutions to grow the Island's economy while protecting the health, welfare and safety of the people of Puerto Rico," said Victor A. Suarez, secretary of state, in the release. "This proposal is a reflection of our commitment to work with our creditors on a sustainable solution that does not place the burden on one stakeholder group alone. A crisis of this magnitude must be addressed in concert, otherwise we risk our ability and the opportunity to escape the spiral of a stagnating economy, endless deficits and increasing debt."
Last Week's Most Active Sectors
Revenue bonds comprised 52.95% of new issuance in the week ended Jan. 29, down from 54.02% in the previous week, according to Markit. General obligation bonds comprised 39.01% of total issuance, up from 38.31%, while taxable bonds made up 8.04%, up from 7.67%.
Some of the most actively traded issues were in Virginia, New York and California. In the GO bond sector, the Fairfax County, Va., 4s of 2026 were traded 19 times. In the revenue bond sector, the Triborough Bridge and Tunnel Authority 3s of 2035 were traded 59 times. And in the taxable bond sector, the California state 7.6s of 2040 traded 23 times,
