The $400 million Port Authority of New York and New Jersey consolidated bonds auctioned on Tuesday are "liquid" despite Securities and Exchange Commission Probe, according to investors.
Morgan Stanley won the bid for the bonds, which have yields ranging from 2.73% with a 5% coupon in 2025 to 4% with a 4% coupon in 2044.
"[With Port Authority] you get New York City and New Jersey buyers so it has nice liquidity," a trader in New York said. "It's priced decently. I'm sure the selloff did not help out, but in retrospect I don't think was too bad."
Last week the Port Authority revealed in its preliminary official statement the SEC and other regulation authorities are investigating whether the authority was justified in spending money it raised for New Jersey repair projects not within its jurisdiction.
Despite this disclosure a trader in Chicago said the Port Authority's "headline name" makes the bonds appealing.
"Port Authority does not come out with a lot of debt, so it gets attention when it does come out," the trader in New York said.
The deal is rated Aa3 by Moody's Investors Service and AA-minus by both Standard & Poor's and Fitch Ratings. The bonds are callable at par in 2044.
The Port Authority sold $1 billion taxable bonds in January.
Citigroup Global Markets was expected to price $590 million of Oregon tax anticipation notes on Tuesday. The deal is rated MIG 1 by Moody's, SP-1-plus by S&P and F1-plus by Fitch.
JP Morgan Securities priced a total $234.3 million of New York City Housing Development Corp. revenue bonds. Yields on $225 million were priced at par to yield from 0.40% in 2016 to 4.30% in 2047. The bonds are callable at par in 2023 excluding bonds maturing from 2016 to 2018. Yields on $9.2 million were priced at par to yield 1% in 2018 and is callable at par in 2016. The deal is rated Aa2 by Moody's and AA by S&P.
Goldman Sachs will issue a two-fold deal totaling $267.8 million of New Orleans, La., water revenue and refunding bonds. The deal is rated BBB-plus by S&P and BBB by Fitch.
Morgan Stanley will sell $170.7 million of the Palm Beach County, Fla., school board certificates of participation. The deal is rated Aa3 by Moody's and AA-minus by Fitch.
In the competitive market, Georgia auctioned a five-part GO deal totaling about $977.9 million, the largest deal of the week.
Bank of America won the bid for $325.4 million of GOs. Yields ranged from 2.44% with a 5% coupon in 2025 to 3.43% with a 4% coupon in 2034. The bonds are callable at par in 2024.
Wells Fargo won the bid for $324.6 million of GOs. No details were available at press time.
J.P. Morgan Securities won the bid for $163 million of GOs. Yields ranged from 0.085% with a 5% coupon in 2015 to 0.95% with a 5% coupon in 2018. There is no call option.
Citigroup won the bid for $151.1 million of GOs. No information was available on the $13.8 million GOs.
The deal received a triple-A rating from Moody's, S&P and Fitch.
Citigroup Global Markets won the bid for $135.6 million of Seattle, Wash., revenue bonds. Yields ranged from 0.14% with a 3% coupon in 2015 to 3.82% with a 4% coupon in 2039. The bonds are callable at par in 2024 and are rated Aa1 by Moody's and AA-plus by S&P.
Munis weakened Tuesday afternoon, with bonds maturing in six to nine years rising as much as one basis point. Yields maturing in 10 to 13 years grew as much as two basis points and those maturing beyond 2029 climbed as much as one basis point. Short-term yields were steady.
Treasuries weakened Tuesday afternoon, with the 10-year benchmark gaining four basis points to 2.64% and the 30-year yields rising three basis points to 3.43%. The two-year notes rose one basis point to 0.48%.
