Middleton-Cross Plains ASD sells bonds as municipals show strength

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Municipal bonds remained strong on Monday as a Wisconsin school district sold bonds in the primary market.

Primary market
Volume is estimated at $4.9 billion this week with a calendar comprised of $3.5 billion of negotiated deals and $1.4 billion of competitive sales.

On Monday, the Middleton-Cross Plains Area School District, Wis., competitively sold $138.9 million of Series 2019A unlimited tax general obligation school building and improvement bonds. Citigroup won the issue with a true interest cost of 3.3298%.

Proceeds will be used to finance various school improvements.

The financial advisor is Ehlers. The bond counsel is Quarles & Brady.

The deal is rated Aa1 by Moody’s Investors Service.

On Tuesday, Clark County, Nev., will competitively sell $100 million of Series 2019 limited tax GO Flood control bonds additionally secured with pledged revenue.

The deal is rated Aa1 by Moody’s and AA-plus by S&P Global Ratings.

The financial advisors are Hobbs, Ong & Associates and PFM Financial Advisors. The bond counsel is Sherman & Howard.

The week’s biggest deal is for Intel Corp. On Wednesday, Bank of America Merrill Lynch is expected to price the Chandler Industrial Development Authority, Ariz.’s $500 million of Series 2019 industrial development revenue bonds and the Oregon Business Development Commission’s $100 million of Series 250 economic development revenue bonds.

Also Wednesday, Ramirez & Co. is expected to price the Los Angeles Department of Airports’ $438 million of revenue bonds. The issue consists of Series 2019A subordinate revenue bonds subject to the alternative minimum tax, Series 2019B subordinate revenue bonds not subject to the AMT and Series 2019C subordinate refunding revenue bonds not subject to the AMT.

The deal is rated Aa3 by Moody’s and AA-minus by S&P and Fitch Ratings.

In the competitive arena on Wednesday, the New York City Municipal Water Finance Authority is selling $390.415 million of Fiscal 2019 Series EE water and sewer system second general resolution revenue bonds in two offerings. The deals consist of $275 million of Subseries EE-2 bonds and $115.415 million of Subseries EE-1 bonds.

The financial advisors are Lamont Financial Services and Drexel Hamilton. The bond counsel are Nixon Peabody and the Hardwick Law Firm.

The deals are rated Aa1 by Moody’s and AA-plus by S&P and Fitch.

Bond sale

Wisconsin
Click here for the Middleton-Cross sale

Bond Buyer 30-day visible supply at $6.26B
The Bond Buyer's 30-day visible supply calendar decreased $1.20 billion to $6.26 billion for Monday. The total is comprised of $2.38 billion of competitive sales and $3.88 billion of negotiated deals.

Secondary market
Municipal bonds were mostly stronger Monday, according to a read of the MBIS benchmark scale. Benchmark muni yields fell as much as one basis point in the one- to eight-year and 12- to 30-year maturities, rose less than a basis point in the nine- and 10-year maturities and remained unchanged in the 11-year maturity.

High-grade munis were mostly stronger, according to MBIS, with muni yields falling as much as one basis point in the one- to eight-year and 12- to 30-year maturities, rising less than a basis point in the nine- and 10-year maturities and remaining unchanged in the 11-year maturity.

Investment-grade municipals were steady on Refinitiv Municipal Market Data’s AAA benchmark scale, which showed the yield on both the 10-year muni general obligation and the 30-year muni maturity remaining unchanged.

Treasury bonds were weaker as stock prices traded higher.

On Friday, the 10-year muni-to-Treasury ratio was calculated at 79.1% while the 30-year muni-to-Treasury ratio stood at 98.9%, according to MMD. The muni-to-Treasury ratio compares the yield of tax-exempt municipal bonds with the yield of taxable U.S. Treasury with comparable maturities. If the muni/Treasury ratio is above 100%, munis are yielding more than Treasury; if it is below 100%, munis are yielding less.

Week's actively traded issues
Revenue bonds comprised 55.40% of total new issuance in the week ended Feb. 22, up from 55.39% in the prior week, according to IHS Markit. General obligation bonds made up 38.85%, up from 38.65%, while taxable bonds accounted for 5.75%, down from 5.96%.
Some of the most actively traded munis by type in the week were from Puerto Rico issuers.

In the GO bond sector, the Puerto Rico Commonwealth 8s of 2035 traded 58 times. In the revenue bond sector, the Puerto Sales Tax Financing Corp. 5s of 2058 traded 148 times. In the taxable bond sector, the COFINA 4.55s of 2040 traded 33 times.

Treasury sells notes
The Treasury Department Monday auctioned $40 billion of two-year notes with a 2 1/2% coupon at a 2.503% yield, a price of 99.994183. The bid-to-cover ratio was 2.50. Tenders at the high yield were allotted 98.97%. The median yield was 2.485%. The low yield was 2.400%.

Treasury also auctioned and $39 billion 182-day discount bills at a 2.455% high rate. The coupon equivalent was 2.527%. The price was 98.758861. The median bid was 2.440% and the low bid was 2.400%. Tenders at the high rate were allotted 94.16%. The bid-to-cover ratio was 3.17.

Gary Siegel contributed to this report.

Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation. Click here for a brief tour of the Workstation, or contact Ziad Saba at 212-803-6079 for more information.

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