Prices of top-rated municipal bonds were lower at mid-session, as the market saw the state of Georgia sell about $1.3 billion of general obligation bonds in the primary.
Primary Market
The Peach State's offerings consisted of five separate sales.
Citi won $279.15 million of Series 2015C GO refunding bonds with a true interest cost of 1.02%. The bonds were priced to yield from 0.28% with a 5% coupon in 2016 to 1.55% with a 2% coupon in 2020.
Citi won $265.10 million of Series 2015B taxable GOs, Tranche 1, with a TIC of 2.48%. The bonds were priced at par to yield from 0.30% in 2016 to 3.13% in 2025.
Citi won the $288.03 million of Series 2015A GOs, Tranche 2, with a TIC of 3.38%. The bonds were priced to yield from 2.45% with a 5% coupon in 2026 to 3.58% with a 3.50% coupon in 2035.
Goldman Sachs won the $275.32 million of Series 2015A general obligation bonds, Tranche 1, with a TIC of 1.8189%. The bonds were priced as 5s to yield from 0.19% in 2016 to 3.34% in 2025.
Wells Fargo Securities won the $182.73 million of Series 2015B taxable GOs, Tranche 2, with a TIC of 4.11%. The bonds were priced to yield from 3.32% with a 3.625% coupon in 2026 to 4.00% with a 4.25% coupon in 2030; a 2035 maturity was priced at par to yield 4.15%.
Ahead of the sale, Moody's Investors Service, Standard & Poor's and Fitch Ratings all affirmed the state's triple-A ratings.
Public Resources Advisory Group was the state's financial advisor. Holland & Knight was bond counsel and Kutak Rock was disclosure counsel.
The last time the Peach State sold comparable bonds in the competitive market was on June 17, 2014, when Wells Fargo Securities won $329.25 million of Series 2014A GOs, Tranche 1, with a TIC of 1.63%.
Since 1995, Georgia has issued about $21 billion of bonds, with the most issuance occurring in 2006 and 2009 when the state sold $1.7 billion and $2.5 billion, respectively. The state issued the least amount of bonds in 1996 and 2008 when it sold $496 million and 532 million, respectively.
Also on Tuesday, JPMorgan is expected to price Maricopa County, Ariz.'s $184.99 million Series 2015 certificates of participation. The deal is rated Aa1 by Moody's and AA-plus by S&P and Fitch.
Secondary Market
The yield on the 10-year benchmark muni general obligation on Tuesday was up by as much as one basis point from 2.35% on Monday, while the yield on the 30-year GO was up by as much as two basis points from 3.31%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were lower as well on Tuesday with the yield on the two-year Treasury note rising to 0.71% from 0.68% on Monday, while the 10-year yield increased to 2.43% from 2.38% and the 30-year yield rose to 3.14% from 3.10%.
The 10-year muni to Treasury ratio was calculated on Monday at 98.8% versus 101.8% on Friday, while the 30-year muni to Treasury ratio stood at 106.7% compared to 106.8%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 38,201 trades on Monday on volume of $8.313 billion.
The most active bond, based on the number of trades, was the New York State Dormitory Authority Series 2015A revenue bonds (non-state supported debt) for the North Shore Long Island Jewish obligated Group 4 1/8s of 2035, which traded 214 times at an average price of 100.104 with an average yield of 4.089%. The bonds were initially priced at 97.535 to yield 4.28%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $264.3 million to $12.54 billion on Tuesday. The total is comprised of $5.76 billion competitive sales and $6.78 billion of negotiated deals.
