The municipal bond market saw the $750 million New York City Transitional Finance Authority deal priced for retail investors on Monday while the $743 million King County, Wash., bonds were priced for institutions.
Meanwhile, prices of top-quality municipal bonds remained strong, traders said, as yields weakened slightly.
Primary Market
The New York City Transitional Finance Authority kicked off the week's new issuance calendar with the retail pricing of $750 million of building aid revenue bonds. Ramirez & Co. priced the bonds to yield from 0.66% with a 4% coupon in 2017 to 2.87% with a 5% coupon in 2025; a 2044 split term was priced as 4s to yield 3.36% in 2044, while other portion was not offered for retail. The 2016 maturity was offered as a sealed bid. No retail orders were taken in the 2028-31, 2033-34, 2036-37, and 2040.
The issue has a second day of orders for mom and pop investors on Tuesday before being priced for institutions on Wednesday. The bonds are rated Aa2 Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings.
J.P. Morgan Securities on Monday priced King County, Wash.'s $742.545 million of sewer revenue refunding and limited tax general obligation refunding bonds for institutions after a one-day retail order period on Friday.
The $486.89 million sewers were priced to yield from 0.39% with a 3% coupon in 2016 to 2.92% with a 5% coupon in 2038; a 2040 split term was priced as 3 1/2s to yield 3.51% and as 5s to yield 2.96%; a 2044 term was priced as 4s to yield 3.41% and a 2047 term was priced as 5s to yield 3.07%. The sewers are rated Aa2 by Moody's and AA-plus by S&P.
The $255.655 million GOs, which are payable from sewer revenues, were priced to yield from 0.36% with a 2% coupon in 2016 to 3.27% with a 4% coupon in 2038. The GOs are rated Aa1 by Moody's and AAA by S&P.
Some of the other large offerings on tap this week are a $502 million Illinois Finance Authority revenue bond sale for Chicago's Rush University Medical Center Obligation Group to be priced by Goldman, Sachs on Thursday; a $400 million sale from the N.Y. Metropolitan Transportation Authority to be priced by JPMorgan on Thursday; a $400 million taxable "corporate cusip" bond deal to be priced by Wells Fargo Securities on Wednesday for the University of Notre Dame Du Lac in Indiana; and the Oregon Department of Transportation's $378.96 million highway user tax revenue bonds and senior lien refunding bonds to be priced by Morgan Stanley.
The largest competitive sale is the Orange County Sanitation District, Calif.'s $131 million wastewater refunding obligations, going out for bid on Tuesday.
Secondary Market
Prices of top-quality municipal bonds resumed their upward climb on Monday.
The yield on the benchmark 10-year general obligation was down as much as one basis point from 1.88% on Friday, while the yield on 30-year GOs was off as much as two basis points from 2.67% according to the final read of Municipal Market Data's triple-A scale.
Treasury prices were higher on Monday, with the two-year note yield down to 0.56% from 0.58% on Friday. The 10-year yield dropped to 1.93% from 1.97%, while the 30-year yield declined to 2.53% from 2.56%.
On Friday, the 10-year muni to Treasury ratio was at 95.6% compared to 94.6% on Thursday, while the 30-year muni to Treasury ratio was at 104.6% versus 104.4%.
MSRB Reports Previous Session's Activity
The Municipal Securities Rulemaking Board reported 31,273 trades on Friday on volume of $8.785 billion.
Most active on Friday, based on the number of trades, was the New Jersey Transportation Trust Fund Authority transportation program bonds, Series AA 4 1/4s of 2044, which traded 154 times with an average price of 102.669 and an average yield of 3.909%.
