Top-shelf municipal bonds ended stronger on Tuesday, according to traders, with the yield on the 30-year municipal falling into record low territory.
In the primary, the state of Georgia and a Maryland issuer sold a bevy of big, best-quality competitive offerings and a New York issuer came to market with a lower-rated, higher yielding negotiated airport deal.
Secondary Market
The yield on the 30-year general obligation fell four basis points to a record low of 2.36% from 2.40% on Monday, according to the final read of Municipal Market Data's triple-A scale. The previous low for the 30-year was hit on May 17 when it dropped to 2.39%.
The yield on 10-year benchmark muni general obligation fell one basis point to 1.61% from 1.62% on Monday, according to MMD.
U.S. Treasuries were slightly stronger on Monday. The yield on the two-year Treasury slipped to 0.78% from 0.79% on Monday, while the 10-year Treasury yield dipped to 1.71% from 1.72% and the yield on the 30-year Treasury bond declined to 2.53% from 2.54%.
The 10-year muni to Treasury ratio was calculated at 94.0% on Tuesday compared to 94.1% on Monday, while the 30-year muni to Treasury ratio stood at 93.1% versus 94.3%, according to MMD.
Primary Market
In the competitive arena on Tuesday, Georgia sold about $1.37 billion of bonds in five separate offerings.
Citigroup won the $382.19 million of Series 2016C-1 and C-2 general obligation refunding bonds with a true interest cost of 1.49%. The $358.256 million of Series 2016C-1 bonds were priced to yield from 0.459% and 0.559% with 5% coupons in a split 2017 maturity to 1.80% with a 3% coupon in 2027. The $23.93 million of Series 2016C-2 bonds were priced as 2s to yield 1.44% in 2023.
JPMorgan Securities won the $361.64 million of Series 2016A Tranche 1 GOs with a TIC of 1.24%. JPMorgan also won the $355.66 million of Series 2016A Tranche 2 GOs with a TIC of 2.69%. Pricing information was not available.
And JPMorgan won the $199.87 million of Series 2016B taxable GOs with a TIC of 2.57%. The deal was priced to yield from 0.50% with a 2% coupon in 2017 to 2.91% with a 2.95% coupon in 2035.
Morgan Stanley won the $67.99 million of Series 2016D taxable refunding GOs with a TIC of 1.78%. All five sales are rated triple-A by Moody's Investors Service, S&P Global Ratings and Fitch Ratings.
Since 2006, the Peach State has sold about $13 billion of bonds, with the most issuance occurring in 2009 when it sold $2.51 billion and the least happening in 2008 when it sold $522.5 million.
Also on Tuesday, Prince George's County, Md., competitively sold $174.15 million of GOs in two separate offerings.
Bank of America Merrill Lynch won the $115.8 million of Series 2016A GO consolidated public improvement bonds with a TIC of 2.197%. The issue was priced to yield from 0.66% with a 5% coupon in 2017 to 2.41% with a 4% coupon in 2036. BAML also won the $58.35 million of Series 2016B GO consolidated public improvement refunding bonds with a TIC of 1.577%. That issue was priced to yield from 0.92% with a 4% coupon in 2019 to 2.15% with a 3% coupon in 2028. Both deals are rated triple-A by Moody's, S&P and Fitch.
In the negotiated sector on Tuesday, Citi priced the New York Transportation Corp.'s $844.21 million of Series 2016 special facilities revenue refunding bonds for the American Airlines John F. Kennedy International Airport project.
The issue was priced as 5s to yield from 1.85% in 2017 to 2.90% in 2021; a 2026 maturity was priced as 5s to yield 3.30% and a 2031 maturity was priced as 5s to yield 3.50%.
The deal, which is subject to the alternative minimum tax, is rated BB-minus by S&P and BB by Fitch.
JPMorgan priced the District of Columbia's $431.82 million of Series 2016A GO bonds. The issue was priced to yield from 0.75% with a 3% coupon in 2018 to 2.73% with a 4% coupon in 2036; a triple-split 2041 maturity was priced as 3s to yield 3.10% as 4s to yield 2.82% and as 5s to yield 2.57%. The deal is rated Aa1 by Moody's and AA by S&P and Fitch.
Barclays Capital priced the Pennsylvania State University's $351.08 million of Series 2016A bonds and Series 2016B refunding bonds.
The $123.06 million of Series 2016A bonds were priced to yield from 0.74% with a 4% coupon in 2017 to 2.49% with a 5% coupon in 2036; a 2041 term bond was priced as 5s to yield 2.60%. The $228.02 million of Series 2016B refunding bonds were priced to yield from 0.74% with a 4% coupon in 2017 to 2.79% with a 4% coupon in 2036. The deal is rated Aa1 by Moody's and AA by S&P.
And the action will continue in the competitive arena on Wednesday when Maryland competitively sells $1.04 billion of bonds.
The state will offer State and Local Facilities Loan of 2016, First Series general obligation bonds. The deal is rated triple-A by Moody's Investors Service, S&P Global Ratings and Fitch Ratings.
Also Wednesday, Seattle, Wash., will sell $165 million of Series 2016 drainage and wastewater system improvement and refunding revenue bonds.
Additionally, Clark County, Nev., will sell $108 million of Series 2016 highway revenue refunding bonds.
And the Fayetteville Public Work Commission, N.C., will offer about $112 million of Series 2016 revenue bonds on Wednesday.
In the negotiated sector, Piper Jaffray is expected to price the Pennsylvania Turnpike Commission's $440 million of Series 2016 A1 and A2 revenue bonds on Wednesday.
Citigroup is set to price the San Diego County Water Authority's $340 million of Series 2016A green bonds and 2016B senior bonds.
On the short-term negotiated calendar, Wells Fargo Securities is set to price Los Angeles County's $800 million of tax and revenue anticipation notes on Wednesday.
