Prices of top-quality municipal bonds finished weaker on Thursday, traders said, as the last of the week's big new issues came to market led off by a large sale from an issuer in the Bay State.
Citigroup priced and then repriced and upsized for institutions the Massachusetts Commonwealth Transportation Fund's $500 million of Series 2015A special obligation revenue bonds under the Rail Enrichment Program. The issue was priced at $450 million for retail investors on Wednesday.
The CTF bonds were priced to yield from 0.44% with a 5% coupon in 2017 to 1.99% with 4% and 5% coupons in a split 2024 maturity; and from 3.45% with a 5% coupon in a 2028 to 3.09% with a 5% coupon in 2038. A split 2040 maturity was priced as 4s to yield 3.48% and as 5s to yield 3.13% and a split 2045 maturity was priced as 4s to yield 3.60% and as 5s to yield 3.20%. The bonds were rated triple-A by Moody's Investors Service and Standard & Poor's.
The REP was established to issue general obligation or special obligation bonds to fund the capital expenditures of MassDOT for the MBTA. Proceeds from the sale, the program's first special obligation issuance, will be used to fund six projects.
Morgan Stanley priced the state of Hawaii's $245.14 million of airport system Series 2015A AMT and Series 2015B non-AMT revenue bonds. The $235.92 million of AMT bonds were priced as 5s to yield 3.85% in 2041 while a 2045 split maturity was priced as 4 1/8s to yield 4.20% and as 5s to yield 3.92%. The $9.23 million of non-AMT bonds were priced as 4s to yield 4.02% in a 2045 bullet maturity. The bonds were rated A1 by Moody's, A-plus by S&P and A by Fitch Ratings.
In the competitive arena, the Metropolitan Atlanta Rapid Transit Authority sold $181.57 million of Series 2015B Third Indenture Series sales tax revenue bonds and Series 2015C refunding bonds to Wells Fargo Securities, who won the issue with a true interest cost of 3.45%.
The $88.49 million of Series 2015A bonds were priced to yield from 1.46% with a 5% coupon in 2021 to 2.90% with a 3% coupon in 2029 and priced as 5s to yield from 3.29% in 2041 to 3.34% in 2045. The $93.09 million of Series 2015C bonds were priced as 5s to yield 2.39% in 2026 to 2.68% in 2029. The issue was rated Aa2 by Moody's, AA-plus by S&P and AA-minus by Fitch.
Previously, MARTA sold comparable bonds on April 14, when JPMorgan Securities won $87 million of the Series 2015A sales tax revenue bonds with a true interest cost of 4.08%.
Barclays Capital priced for retail the California Health Facilities Financing Authority's $378.69 million of Series 2015 refunding revenue bonds for the Cedars-Sinai Medical Center.
The bonds were priced for retail as 2s to yield 0.28% in 2016 and as 3s to yield 0.64% in 2017 and to yield from 1.35% with 2% and 5% coupons in a split 2020 maturity to 3.68% with a 3.50% coupon in 2034. No retail orders were taken in the 2025-2029 or 2030-2033 maturities. The issue was rated Aa3 by Moody's and AA-minus by Fitch.
JPMorgan Securities received the official award on the city of New Orleans, La.'s $75.44 million of Series 2015 General obligation bonds. The issue was priced to yield from 0.60% with a 4% coupon in 2016 to 3.82% with a 3.75% coupon in 2034. The bonds were rated A3 by Moody's, A-plus by S&P and A-minus by Fitch.
Secondary Market
The yield on the 10-year benchmark muni general obligation finished one basis point stronger at 2.10% from 2.09% on Wednesday, while the yield on the 30-year GO was one basis point higher at 3.11% from 3.10%, according to the final read of Municipal Market Data's triple-A scale.
Treasury prices were mostly lower on Thursday, with the yield on the two-year Treasury rising to 0.84% from 0.82% on Wednesday, while the 10-year yield rose to 2.24% from 2.23% and the 30-year yield was unchanged from 3.01%.
The 10-year muni to Treasury ratio was calculated on Thursday at 93.7% versus 93.7% on Wednesday, while the 30-year muni to Treasury ratio stood at 103.3% compared to 103.5%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,733 trades on Wednesday on volume of $7.68 billion.
Tax-Exempt Money Market Funds Post Outflows
Tax-exempt money market funds experienced outflows of $59.7 million, bringing total net assets to $245.17 billion in the period ended Nov. 2, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $607.7 million to $245.23 billion in the previous week.
The average, seven-day simple yield for the 374 weekly reporting tax-exempt funds remained at 0.01% for the 131st straight week.
The total net assets of the 951 weekly reporting taxable money funds fell $8.16 billion to $2.494 trillion in the period ended Nov. 3, after an inflow of $24.96 billion to $2.502 trillion the previous week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 42nd week in a row.
Overall, the combined total net assets of the 1,325 weekly reporting money funds decreased $8.22 billion to $2.739 trillion in the period ended Nov. 2, which followed an inflow of $24.36 billion to $2.748 trillion the week before.
