Municipal bond investors who have been stuck in a market yearning for new issuance got a taste of new buying opportunities Tuesday.
This week marks the first time prospective issuance has been greater than $5 billion since January, with two deals offering more than $500 million of bonds. One of those deals, $650 million of New York City general obligation bonds, held a second retail order period Tuesday in which yields on the bonds tightened.
The yield on 3% coupon bonds maturing in 2017 fell three basis points to 0.56%, while bonds maturing in 2039 were changed from a 4.25% coupon with a 4.3% yield to a 4% coupon with a 4.25% yield.
Also in the negotiated market, New Jersey and Missouri issuers each brought deals greater than $100 million.
Barclays Capital as lead underwriter priced and repriced $190.14 million revenue bonds for the New Jersey Educational Facilities on behalf of Montclair State University. The yields ranged from 0.35% with a 3% coupon maturing in 2016, to 4.21% with a 5% coupon for bonds maturing in 2044.
The bonds, callable at par in 2024, are rated A1 by Moody's Investors Service and AA-minus by Fitch Ratings.
Springfield School District R-XII, Mo., is issuing $109.23 million, $26.65 million school building bonds and $82.575 million refunding bonds. The managing underwriter is George K. Baum & Co., and the bonds earned a AA-plus rating from Standard & Poor.
In the competitive market, Kentucky issued a three-part deal Tuesday totaling $243.9 million. By press time, Morgan Stanley had won the bid of $10.1 million of taxable bonds, while Bank of America Merrill Lynch was awarded $38.3 million of general receipt bonds. Reports indicated that JP Morgan was the leading bidder on the remaining $195.4 million of bonds.
Yields on short-term bonds in the muni market were steady Tuesday afternoon, according to Municipal Market Data, while those with maturities beyond 2026 gained one to three basis points.
Treasury yields softened, with the 10-year yield gaining seven basis points to 2.68%, while the 30-year yield climbed six basis points to 3.62%. The two-year yield was up one basis point to 0.34%.
