Prices of top-shelf municipal bonds were stronger at mid-session, traders said, as the New York City Transitional Finance Authority hit the market with a big negotiated deal and two competitive sales.
JPMorgan Securities priced the TFA’s $750 million of future tax secured subordinate bonds for institutions after holding a two-day retail order period.
The $350 million of Fiscal 2016 Subseries B-1 bonds were priced to yield from 2.74% with a 5% coupon in 2028 to 3.68% with a 3.625% coupon in 2039.
The $362.03 million of Fiscal 2016 Series C bonds were priced to yield from 0.84% with a 5% coupon in 2018 to 3.14% with a 3% coupon in 2030; a 2017 maturity was offered as a sealed bid.
The $37.98 million of Fiscal 2016 Series D bonds were priced to yield from 0.84% with a 3% coupon in 2018 to 2.62% with a 5% coupon in 2027; the 2016 and 2017 maturities were offered as sealed bids.
The TFA also sold $250 million of bonds in two competitive sales.
RBC Capital Markets won the $201.66 million of Series B, Subseries B-2 taxable bonds with a true interest cost of 2.60%. Pricing information was not immediately available.
Wells Fargo Securities won the $48.34 million of Series B, Subseries B-3 taxable bonds with a TIC of 3.498%. The issue was priced as 3.45s to yield 3.30% (127 basis points above the comparable Treasury security) in 2026 and 3.45% in 2027 (142 basis points above the comparable Treasury security).
The TFA issues were rated Aa1 by Moody’s Investors Service and triple-A by both Standard & Poor’s and Fitch Ratings.
Bank of America Merrill Lynch priced Harris County, Texas’ $329.29 million offering.
The $49.995 million of Series 2015B permanent improvement refunding bonds were priced as 5s to yield from 0.62% in 2017 to 1.79% in 3033, and from 2.26% in 2025 to 2.51% in 2027; a 20126 maturity was offered as a sealed bid. The $203.15 million of Series 2015A unlimited tax road refunding bonds were priced as 5s to yield from 2.26% in 2025 to 2.86% in 2031; a 20126 maturity was offered as a sealed bid.
The $46.92 million of Series 2015A flood control district improvement refunding bonds were priced to yield from 2.51% with a 5% coupon in 2027 to 3.20% with a 3% coupon in 2030. The $29.24 million of Series 2015B flood control district contract tax refunding bonds were priced as 5s to yield from 2.61% in 2028 to 2.79% in 2030.
The issue was rated triple-A by Moody’s and S&P.
On Thursday, Citigroup is set to price the New Jersey Turnpike Authority’s $750 million of revenue bonds. The deal was rated A3 by Moody’s, A-plus by S&P and A by Fitch.
Since 1995, the NJTA has issued over $10 billion of debt. The authority sold the most bonds in 2009 and 2013, when they issued $2.5 billion and $2.1 billion, respectively. The NJTA did not sell debt from 2006 through 2009 or in 2011.
Secondary Market
Municipal bond prices were stronger on Wednesday. The yield on the 10-year benchmark muni general obligation was as much as one basis point weaker from 2.03% on Tuesday, while the yield on the 30-year GO was as much as one basis point weaker from 3.08%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were higher on Wednesday, with the yield on the two-year Treasury slipping to 0.62% from 0.63% on Tuesday, while the 10-year yield fell to 2.03% from 2.07% and the 30-year yield decreased to 2.87% from 2.92%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 96.6% versus 99.7% on Monday, while the 30-year muni to Treasury ratio stood at 104.7% compared to 106.6%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 36,546 trades on Tuesday on volume of $7.30 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $2.97 billion to $9.70 billion on Wednesday. The total is comprised of $2.24 billion competitive sales and $7.46 billion of negotiated deals.
