The municipal bond primary market saw several big offerings hit the screens on Wednesday — as Morgan Stanley priced a big taxable deal in the negotiated sector and won a large note sale in the competitive arena.
In secondary trading, yields on long-dated top-rated municipal bonds rose as much as nine basis points.
The MBIS municipal non-callable 5% GO benchmark scale was weaker in midday trading.
The 10-year muni benchmark yield rose to 2.323% on Wednesday from the final read of 2.278% on Tuesday, according to Municipal Bond Information Services. The MBIS 30-year benchmark muni yield gained to 2.826% from 2.780%.
The MBIS benchmark index is updated hourly on the Bond Buyer Data Workstation.
Top-rated municipal bonds are weaker at mid-session. The yield on the 10-year benchmark muni general obligation rose five to seven basis points from 2.05% on Tuesday, while the 30-year GO yield gained seven to nine basis points from 2.64%, according to a read of MMD’s triple-A scale.
U.S. Treasuries were weaker in midday activity. The yield on the two-year Treasury gained to 1.98% on Wednesday from 1.96% on Tuesday, the 10-year Treasury yield rose to 2.58% from 2.55% and the yield on the 30-year Treasury increased to 2.93% from 2.88%.
On Tuesday, the 10-year muni-to-Treasury ratio was calculated at 80.5% compared with 81.0% on Monday, while the 30-year muni-to-Treasury ratio stood at 91.5% versus 92.1%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 44,737 trades on Tuesday on volume of $10.96 billion.
On Wednesday, Morgan Stanley priced Stanford Health Care, Calif.’s $500 million of Series 2018 corporate CUSIP taxable bonds.
The taxables were priced at par with a 3.795% coupon (about 90 basis points above the comparable Treasury 30-year security) and are due on Nov. 15, 2048, with a first interest payment on May 15.
Proceeds of the sale will be used for general corporate purposes.
The deal is rated Aa3 by Moody’s Investors Service, AA-minus by S&P Global Ratings and AA by Fitch Ratings.
In the competitive arena on Wednesday, Worcester, Mass., sold $103.795 million of GOs in two separate sales.
Morgan Stanley won the $75.195 million of municipal purpose loan of 2018 Series A GOs with a true interest cost of 2.8991% while Raymond James won the $28.6 million of taxable Series B GOs with a TIC of 3.7379%.
The deals are rated Aa3 by Moody’s, AA-minus by S&P and AA by Fitch.
Since 2008, Worcester has sold about $963 million of bonds, with the most issuance occurring in 2016 when it sold $170 million. The city saw a low year in 2009 when it sold $40.4 million.
In the short-term competitive sector on Wednesday, Colorado sold $375 million of Series 2017B education loan program tax and revenue anticipation notes.
Morgan Stanley won the TRANs and took: $250 million of the notes with a dollar bid of $101.23, a 4% coupon, and a premium of $3,075,000, an effective rate of 1.2516%; $75 million of the notes with a dollar bid of $101.21, a 4% coupon, and a premium of $909,000, an effective rate of 1.2914%; and $50 million of the notes with a dollar bid of $101.22, a 4% coupon, and a premium of $608,000, an effective rate of 1.2825%.
The TRANs are rated MIG1 by Moody’s and SP1-plus by S&P.
On Thursday, RBC Capital Markets is expected to price the Pennsylvania Commonwealth Financing Authority’s $410 million of Series 2018A taxable revenue bonds for the Plancon program. The deal is rated A1 by Moody’s, A by S&P and A-plus by Fitch.
JPMorgan Securities is set to price the Illinois Finance Authority’s $218.67 million of Series 2018 taxable revenue refunding bonds for the Ann and Robert H. Lurie Children’s Hospital of Chicago on Thursday. The deal is rated AA-minus by S&P and AA by Fitch.
Bond Buyer 30-day visible supply at $5.84B
The Bond Buyer's 30-day visible supply calendar decreased $1.14 billion to $5.84 billion on Wednesday. The total is comprised of $2.48 billion of competitive sales and $3.36 billion of negotiated deals.
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 Vanessa Kim at 212-803-8474 for more information.