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.
Secondary market
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
The MBIS benchmark index is updated hourly on the
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.
Primary market
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.
