The municipal market is posed for another active day on Thursday with primary deals slated as equities remain in the red. A continued "flight to safety" mentality is expected as the high quality deals are expected to pick up widespread interest from investors spooked by recent stock losses.
Primary
- In the negotiated markets, JP Morgan will price $288 million certificates of participation on behalf of the Miami-Dade County School Board. The deal is an all-serial structure with maturing ranging from 2017 through 2031 and is rated A1 by Moody's and A by Standard & Poor's.
- A three-part offering from the California State Public Works Board is expected to be priced by Barclays Capital Inc. after Wednesday's retail order period. The $253.97 million deal is rated A1 by Moody's and A-minus by the other two major rating agencies and is comprised of $110.30 million of lease revenue bonds to finance Department of Corrections and Rehabilitation projects at various correctional facilities; $78.41 million of lease revenue bonds to finance various capital projects, and $65.25 million of lease revenue refunding bonds to refund debt on behalf of the Department of Corrections' Pleasant Valley State Prison project.
- Morgan Stanley will bring a $179 million Connecticut Housing Finance Authority deal on Thursday as well to finance the state's housing mortgage finance program. The deal carries a triple-A rating from both Moody's Investor Services and Standard & Poor's.
Secondary
- Following yesterday's DASNY deal, the Port Authority of New York and New Jersey emerged as a top trader on Thursday morning, with the entity's 5s of 2032 fetching over $28 million in secondary trades in morning trading sessions. Yields on the bonds tightened four basis points to 2.54% from 2.58% in round lot trading on Thursday morning, down from the initial offering yield in late August of 3.14%, according to data collected by Municipal Securities Rulemaking Board's disclosure website EMMA.
- New Jersey's Tobacco Settlement Financing Corporation was another top trader on Thursday morning, collecting $25 million in secondary trades. Yields on the 5s of 2041 tightened two basis point in round lot trading to 7.23% from 7.25%.
Scales
- After a volatile Wednesday, scale settled down on Thursday morning, tightening marginally across the curve. Yields on bonds maturing between 2018 through 2020 strengthened the most, with yield falling between three and five basis points. Yields on bond maturing between 2015 through 2017 fell up to three basis points, while yields on bonds maturing between 2021 through 2044 fell up to two basis points.
