Prices of top-rated municipal bonds were stronger at mid-session, traders, said, with yields on some maturities falling by as much as four basis points.
Meanwhile, the market saw several large issues come to market on Tuesday, led off by big sales from Honolulu, the Illinois Finance Authority and the state of Oregon.
Primary Market
Bank of America Merrill Lynch priced Honolulu, Hawaii's $871.53 million of 2015 Series A through D tax-exempt general obligation bonds. The bonds are rated Aa1 by Moody's Investors Service and AA-plus by Fitch Ratings.
The $380.67 million Series A bonds were priced as 5s to yield from 0.45% in 2016 to 3.15% in 2039; a 2015 maturity was offered as a sealed bid. The $211.45 million Series B bonds were priced as 5s to yield from 1.13% in 2018 to 2.89% in 2031. The $252.11 million Series C bonds were priced to yield from 1.42% with a 4% coupon and a 1.375% coupon in a split 2019 maturity to 3.55% with a 3.50% coupon and 3.34% with a 4% coupon in a split 2033 maturity. The $27.31 million Series D bonds were priced in a 2016 bullet maturity as 5s to yield 0.45%.
Goldman, Sachs priced the Illinois Finance Authority's $288.31 million of Series 2015C revenue refunding bonds for the Silver Cross Hospital and Medical Center. The deal is priced as 5s to yield 0.89% in 2015 to 3.94% in 2030. A 2035 term bond was priced as 5s to yield 4.08%, a 2037 term was priced as 4 1/8s to yield 4.40% and a 2044 term was priced as 5s to yield 4.22%. The bonds are rated Baa1 by Moody's and BBB-plus by Fitch.
Since 2003, the Illinois Finance Authority was issued roughly $28.68 billion of bonds. The highest years of issuance came in 2007 and 2008 when it sold $4.600 billion and $4.136 billion of bonds, respectively. Since 2010, issuance has been steadily declining, which has resulted in low years of issuance in 2013 and 2014, when they sold just $1.442 billion and $1.092 billion of bonds, respectively.
Citigroup Global Markets priced Oregon's $254.45 million of GOs, issued under Article XI for state projects, in three series, following a retail order period Monday. The $171.88 Series F bonds were priced as 5s to yield 0.62% in 2017 to 2.94% in 2035 with a 2039 term bond priced as 5s to yield 3.02%.; a 2016 maturity was offered as a sealed bid. The $72.99 million Series H refunding bonds were priced to yield from 1.48% with a 5% coupon in 2020 to 2.48% with a 5% coupon in 2027. The $9.59 million Series I refunding bonds were priced to yield from 1.56% with a 3% coupon in 2020 to 2.51% with a 5% coupon in 2027. The deal is rated Aa1 by Moody's and AA-plus by both Standard & Poor's and Fitch.
Citi also priced the North Carolina Medical Care Commission's $297.41 million of Series 2015 health care facilities revenue bonds for Vidant Health. The bonds were priced to yield from 0.42% with a 2% coupon in 2016 to 4.02% with a 4% coupon in 2034; a 2040 term bond was priced as 5s to yield 3.64% and a split 2045 term was priced as 4s to yield 4.12% and as 5s to yield 3.69%. The issue is rated A1 by Moody's and A-plus by S&P.
In the competitive arena, Baltimore Co., Md., sold $200 million of bond anticipation notes. J.P. Morgan Securities was the apparent winner with a bid of 0.1884%. The sale was composed of $112 million of consolidated public improvement bond anticipation notes and $88 million of Metropolitan District BANs. The notes are rated MIG-1 by Moody's, SP-1-plus by S&P and F-1-plus by Fitch. No other information was immediately available.
Baltimore County last sold bonds on Dec. 10, 2014, when JPMorgan won $200 million public improvement and Metropolitan District bonds with a TIC of 3.0093%. The county sold notes in two sales on Jan. 24, 2013; Merrill Lynch won the $212 million Metropolitan District BANs with a TIC of 0.1642% and PNC Capital Markets won $11.83 million of certificates of participation with a TIC of 1.3477%.
Secondary Market
Prices of top-quality municipal bonds were stronger. The yield on the 10-year benchmark muni general obligation was down from two to four basis points from 2.12% on Monday, while the yield on 30-year GO was down from two to four basis points from 2.93%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were higher on Tuesday. The yield on the two-year Treasury note declined to 0.64% from 0.65% on Monday, while the 10-year yield decreased to 2.06% from 2.10% and the 30-year yield dropped to 2.62% from 2.68%.
On Monday, the 10-year muni to Treasury ratio was calculated at 99.9% versus 100.4% on Friday, while the 30-year muni to Treasury ratio stood at 109.2% compared to 108.6%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $841.0 million to $10.653 billion on Tuesday. The total is comprised of $3.123 billion competitive sales and $7.530 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 35,310 trades on Monday on volume of $7.180 billion.
Most active on Monday, based on the number of trades, was the New York City Fiscal 2015 Series D GO 3.20s of 2028, which traded 234 times at an average price of 99.877 with an average yield of 3.201%; (initial offering price of 100.00 and an initial offering yield of yield of 3.20%).
