Municipal bond traders are set to see the biggest deal of the week come to market on Tuesday – the much anticipated LaGuardia Airport offering.
Primary Market
Citigroup is set to price the New York Transportation Development Corp.'s $2.31 billion of tax-exempts, subject to the alternative minimum tax, for the LaGuardia Special Facilities Terminal B Redevelopment Project. Underwriters sent around a pre-marketing scale on Monday.
According to the pre-marketing scale, the bonds were yielding from 2.91% with a 5% coupon in 2030 to 3.60% with a 4% coupon in 2037; a split 2041 maturity was priced as 4s and 5s to yield 3.77% and 3.47%; a 2046 maturity was priced as 5s to yield 3.52%; and a split 2051 maturity was priced as 4s and 5 1/4s to yield 3.97% and 3.57%.
The deal is also expected to contain a taxable component totaling about $150 million of bonds.
The offering is rated Baa3 by Moody's Investors Service and triple-B by Fitch Ratings.
On Tuesday, Bank of America Merrill Lynch is holding a second day for retail orders on New York City's $800.13 million of Fiscal 2016 Series E and F GOs ahead of the institutional pricing on Wednesday.
The $774.04 million of Series E bonds were priced on Monday for retail to yield from 0.86% with a 5% coupon in 2019 to 2.90% with a 3% coupon in 2036; the 2017 and 2018 maturities were offered as sealed bids. No retail orders were taken in the 2027-2032 maturities.
The $26.10 million of Series F bonds were priced for retail on Monday to yield from 0.86% with a 3% coupon in 2019 to 2.79% with a 3% coupon in 2034; the 2016-2018 maturities were offered as sealed bids.
New York City GOs are rated Aa2 by Moody's and AA by S&P Global Ratings and Fitch.
Goldman Sachs is expected to price the Municipal Improvement Corp. of Los Angeles' $800.22 million of lease revenue refunding bonds for retail investors on Tuesday ahead of the institutional pricing on Wednesday. The deal is rated A-plus by S&P and Fitch and AA-minus by Kroll Bond Rating Agency.
Since 2006, LAMIC has issued about $2.69 billion of debt, with the largest issuance before this year occurring in 2006 when it sold $449 million of securities. The LAMIC did not issue any bonds in 2011 or 2013.
Piper Jaffray is set to price the Metropolitan Government of Nashville and Davidson County, Tenn.'s $298.98 million of Series 2016 GO refunding bonds. The deal is rated Aa2 by Moody's and AA by S&P.
In the competitive arena on Tuesday, the state of New Mexico is selling $332.79 million of severance tax bonds in two separate sales consisting of $282.86 million of Series 2016A and refunding Series 2016B severance tax bonds and $49.93 million of Series 2016C taxable severance tax bonds.
Loudoun County, Va., will competitively sell $144.67 million of Series 2016A GO public improvement and refunding bonds on Tuesday. The deal is rated triple-A by Moody's, S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $294.0 million to $17.49 billion on Tuesday. The total is comprised of $6.46 billion of competitive sales and $11.03 billion of negotiated deals.
Secondary Market
U.S. Treasuries were narrowly mixed on Tuesday. The yield on the two-year Treasury rose to 0.81% from 0.78% on Monday, while the 10-year Treasury yield gained to 1.76% from 1.75% and the yield on the 30-year Treasury bond was flat from 2.59%.
The yield on its 30-year general obligation scale was steady on Monday as it remained at its record low level of 2.42% set last week, according to the final read of Municipal Market Data's triple-A scale. The yield on the 10-year benchmark muni was unchanged from 1.54% on Friday, according to MMD. Its all-time low of 1.47% was set in November 2012.
The 10-year muni to Treasury ratio was calculated at 87.9% on Monday compared with 90.4% on Friday, while the 30-year muni to Treasury ratio stood at 93.2% versus 94.8%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 36,632 trades on Monday on volume of $10.53 billion.
