Prices of top-rated municipal bonds were steady at mid-session, traders said, as a second wave of new issuance washed over the market on Wednesday.
Traders kept watch on Congressional testimony from Federal Reserve Chair Janet Yellen and speeches from several other Fed officials.
Yellen testified before the U.S. House Financial Service Committee. Her prepared remarks did not touch on monetary policy. However, in answer to a lawmaker's question, she said that U.S. economy has been doing well and if upcoming economic data continue to point to growth, a December interest rate hike would be a "live possibility." The October employment report is set for release on Friday and the Federal Open Market Committee next meets on Dec. 15-16.
New York Fed President William Dudley will deliver an address on Wednesday afternoon while Fed Vice Chairman Stanley Fischer will speak Wednesday evening. They are not expected to comment on interest rates or monetary policy.
Secondary Market
The yield on the 10-year benchmark muni general obligation was unchanged from 2.09% on Tuesday, while the yield on the 30-year GO was steady from 3.10%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were mostly lower on Wednesday, with the yield on the two-year Treasury rising to 0.81% from 0.77% on Tuesday, while the 10-year yield rose to 2.23% from 2.22% and the 30-year yield was unchanged from 3.00%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 94.2% versus 94.4% on Monday, while the 30-year muni to Treasury ratio stood at 103.4% compared to 104.3%, according to MMD.
Primary Market
Citigroup priced for retail the Massachusetts Transportation Fund's $450 million of Series 2015A special obligation revenue bonds under the Rail Enrichment Program. The issue will be priced for institutions on Thursday.
The bonds were priced for retail to yield from 0.70% with 3% and 5% coupons in a split 2018 maturity to 2.02% with 4% and 5% coupons in a split 2024 maturity, and priced as 3 1/4s to yield 3.40% in a 2035 maturity, as 4s to yield 3.48% and as 5s to yield 3.13% in a split 2040 maturity, and as 4s to yield 3.55% in half of a split 2045 maturity. A 2017 maturity was offered as a sealed bid and no retail orders were taken in the 2031 through 2035 maturities or in the other half of the split 2045 maturity.
The bonds are rated triple-A by Moody's Investors Service and Standard & Poor's.
Siebert Brandford Shank priced the Department of Airports of the city of Los Angeles' $301.7 million of Series 2015D AMT and Series 2015E non-AMT senior revenue bonds.
The $273.88 million of Series 2015D AMT bonds were priced as 5s to yield from 0.60% in 2017 to 3.52% in 2036. A 2041 term bond was priced as 5s to yield 3.67%. The $27.82 million of Series 2015E non-AMT bonds were priced to yield from 0.45% with a 3% coupon in 2017 to 3.17% with a 5% coupon in 2036. A 2041 term bond was priced as 5s to yield 3.32%.
The issue was rated Aa2 by Moody's and AA by S&P and Fitch Ratings.
RBC Capital Markets priced the Pennsylvania Housing Finance Agency's $231.15 million of Series 2015-118A AMT and Series 2015-118B non-AMT single-family mortgage revenue bonds.
The $141.15 million of AMT bonds were priced at par to yield from 0.95% and 1.05% in a split 2017 maturity to 3.35% and 3.40% in a split 2026 maturity; a 2030 maturity was priced at par to yield 3.90%, a 2033 maturity was priced at par to yield 4.05%, and a 2040 maturity was priced as 3 1/2s to yield 2.08%. A split 2016 maturity was offered as a sealed bid. The $90 million of non-AMT bonds were priced at par to yield 3.85% in 2035, 4.05% in 2040 and 4.125% in 2045.
The issue is rated Aa2 by Moody's and AA-plus by S&P.
Loop Capital Markets priced for institutions the New York Triborough Bridge and Tunnel Authority's $156.22 million of general revenue bonds for the MTA bridges and tunnels, Series 2015B and Subseries 2008B-3, after holding a one-day retail order period on Tuesday.
The $65 million of Series 2015B bonds were priced to yield from 0.27% with a 2% coupon in 2016 to 3.16% with a 5% coupon in 2035; a 2040 maturity was priced as 5s to yield 3.34% and a 2045 maturity was priced as 5s to yield 3.41%. The $91.22 million of Subseries 2008B-3 bonds were priced as a remarketing as 5s to yield 2.58% in 2027 and 2.70% in 2028 and from 3.06% in 2033 to 3.30% in 2038.
The issue was rated Aa3 by Moody's, AA-minus by S&P and Fitch and AA by Kroll Bond Rating Agency.
Raymond James priced the Virginia Resources Authority's $107.76 million of infrastructure revenue bonds.
The bonds were priced to yield from 0.64% with a 5% coupon in 2017 to 3.63% with a 3.50% coupon in 2036. Term bonds in 2040 and 2045 were priced as 5s to yield 3.23% and 3.30%, respectively, while the 2016 maturity was offered as a sealed bid. The deal is rated triple-A by Moody's and S&P.
JPMorgan priced Anchorage, Alaska's $310.44 million of GO and GO refunding bonds after a one-day retail order period.
The $45.38 million of Series A general purpose GOs were priced to yield from 0.65% with a 3% coupon in 2017 to 3.60% with a 4% coupon in 2035. The $115.95 million of Series B general purpose GO refunding bonds were priced to yield from 0.65% with a 5% coupon in 2017 to 2.69% with a 5% coupon in 2028; a 2016 maturity was offered as a sealed bid. The issue was rated triple-A by S&P and AA-plus by Fitch.
On Thursday afternoon, Barclays Capital is slated to price the California Health Facilities Financing Authority's $378 million of Series 2015 refunding revenue bonds for the Cedars-Sinai Medical Center after a retail order period on Thursday morning. The issue is rated Aa3 by Moody's and AA-minus by Fitch.
Since 2005, the HFFA has issued about $15.7 billion of debt, with the most issuance occurring in 2009 and 2011 when it sold $2.24 billion and $2.33 billion, respectively.
The HFFA sold the least amount of bonds in 2010 and 2014 when it issued and $713 million and $500 million, respectively.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 36,933 trades on Tuesday on volume of $6.51 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $1.77 billion to $8.24 billion on Wednesday. The total is comprised of $3.31 billion competitive sales and $4.93 billion of negotiated deals.
