Prices of top-quality municipal bonds were steady at mid-session, traders said, as bond dealings were very slow due to the Jewish high holy day of Yom Kippur.
Secondary Market
The yield on the 10-year benchmark muni general obligation was steady from 2.12% on Tuesday, while the yield on the 30-year GO was flat from 3.11%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were lower on Wednesday, with the yield on the two-year Treasury note rising to 0.70% from 0.67% on Tuesday, while the 10-year yield rose to 2.14% from 2.12% and the 30-year yield increased to 2.95% from 2.93%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 99.8% versus 97.1% on Monday, while the 30-year muni to Treasury ratio stood at 106.1% compared to 103.2%, according to MMD.
Primary Market
Primary market action was subdued on Wednesday.
Piper Jaffray received the written award on the San Bernardino CCD, Calif.'s $93.51 million of Election of 2008 Series D general obligation bonds.
The $29.07 million of current interest bonds were priced to yield from 0.28% with a 2% coupon in 2016 to 1.01% with a 3% coupon in 2018; and priced as 5s to yield 2.34% in 2024, 2.50% in 2025, 3.58% in 2045 and 3.64% in 2048. The $8.47 million of capital appreciation bonds yield from 2.21% in 2020 to 4.91% in 2040. The $55.98 million of refunding bonds were priced to yield 0.28% with a 2% coupon in 2018 and 0.66% with a 3% coupon in 2017 and priced as 5s to yield from 2.90% in 2028 to 3.15% in 2031.
The issue was rated Aa2 by Moody's Investors Service and AA-minus by Standard & Poor's.
On Thursday, Wells Fargo Securities is expected to price the second part of the San Francisco Bay Area Transit District's $358.56 million offering -- $170.93 million of general obligation refunding bonds, rated triple-A by Moody's and S&P. On Tuesday Wells Fargo priced BART's $186.64 million of Series 2015A sales tax refunding bonds, rated AA-plus by S&P and Fitch.
Since 1995, BART has sold roughly $2.78 billion of debt. The years of 2005 and 2007 saw the most issuance with $452 million and $400 million, respectively. BART did not come to market at all in 1996-1997, 2000, 2002-2004 or 2008-2009.
Contagion Contained
On Tuesday, Citigroup priced Wayne County Airport Authority, Mich.'s $520.06 million of new money and refunding bonds. The issue consisted of $213.33 million of Series 2015D airport revenue non-alternative minimum tax bonds, $74.82 million of Series 2015G non-AMT airport revenue refunding bonds, $224.16 million of Series 2015F AMT airport revenue refunding bonds, and $7.76 million of Series 2015E AMT airport revenue bonds.
Ahead of the sale, WCAA officials had highlighted its legal separation from its struggling home county as the operator of Detroit's airport expected to save more than $3.5 million annually in debt service from the refunding piece of the deal. Part of the transaction restructured debt originally issued by the county into debt backed by general airport revenues. The authority said last week that it will save $1 million a year by wiping the county's pledge off the borrowing and replacing it with its own.
The bonds were rated A2 by Moody's, A by S&P and A-minus by Fitch except for three maturities which were insured by AGM and rated A2 by Moody's and AA by S&P. All three agencies maintain a stable outlook on the credit.
"Wayne County Airport Authority, Mich.'s finalized pricing of $521 million AMT and non-AMT bonds for Detroit's airport, with significant downward yield adjustments in final pricing indicating little taint for the airport authority from Detroit's fiscal woes," Janney Municipal Strategist Alan Schankel wrote in a Wednesday market comment.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,753 trades on Tuesday on volume of $8.304 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $1.75 billion to $7.02 billion on Wednesday. The total is comprised of $2.55 billion competitive sales and $4.46 billion of negotiated deals.
