Prices of top-rated municipal bonds were higher at mid-session, traders said, as yields on some maturities fell by as much as four basis points.
Municipal bond traders were seeing the second wave of new supply hit the market, with large deals from New York, Texas and Hawaii being priced.
Secondary Market
The yield on the 10-year benchmark muni general obligation on Wednesday was off from one to three basis points from 2.27% on Tuesday, while the yield on the 30-year GO was down from two to four basis points from 3.24%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were mixed on Wednesday, with the yield on the two-year Treasury note rising to 0.69% from 0.68% on Tuesday, while the 10-year yield fell to 2.31% from 2.34% and the 30-year yield decreased to 3.03% from 3.08%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 96.9% versus 96.6% on Monday, while the 30-year muni to Treasury ratio stood at 105.2% compared to 104.7%, according to MMD.
Primary Market
Morgan Stanley priced the New York State Dormitory Authority's $1.52 billion of Series 2015A New York State sales tax revenue bonds for institutions after it held a one-day retail order period on Tuesday.
The DASNY bonds were priced to yield from 0.59% with 2%, 3% and 5% coupons in a triple-split 2017 maturity to 2.62% with a 5% coupon in 2027. The 2016 maturity was offered as a sealed bid. The issue was rated triple-A by Standard and Poor's and AA-Plus by Fitch Ratings.
Bank of America Merrill Lynch priced the city and county of Honolulu, Hawaii's $567.5 million of wastewater system revenue bonds, which consist of junior refunding bonds and senior refunding bonds. The senior bonds are rated Aa2 by Moody's Investors Service and AA-minus by S&P while the junior bonds are rated Aa3 by Moody's and AA-minus by S&P.
The $178.04 million of Senior Series 2015A bonds were priced to yield from 0.75% with 3% and 5% coupons in a split 2017 maturity to 3.26% with a 5% coupon in 2035. Term bonds in 2040 and 2045 were priced as 5s to yield 3.44% and 3.52%, respectively. The $272.66 million of Senior Series 2015B refunding bonds were priced to yield from 0.40% with a 3% coupon in 2016 to 3.87% and 3.70% with 3.75% coupon and 4% coupon in a split 2036 maturity. The $116.81 million of Junior Series 2015A refunding bonds were priced to yield from 0.77% with a 4% coupon in 2017 to 3.72% and 3.63% with 3.5% and 4% coupons in a split 2032 maturity.
Since 1995, the city and county of Honolulu has issued roughly $9.26 billion of debt. The years of 2005 and 2012 saw the most issuance with $921 million and $1.18 billion, respectively. Honolulu did not come to market at all in 1996, 2013 or 2014.
Siebert Brandford Shank priced the New York Metropolitan Transportation Authority's $419.71 million of Series 2015C transportation revenue refunding bonds for retail investors. The $382.76 million of Subseries 2015C-1 fixed-rates were priced to yield from 2.79% with a 5% coupon in 2025 to 3.56% with a 5% coupon in 2035; the $36.96 million of Subseries 2015C-2 fix-rate mandatory tender bonds were priced as 4s to yield 1.76% in 2032 with a mandatory tender date of 2020. The issue was rated A1 by Moody's, AA-minus by S&P and A by Fitch. The one-day retail order period is being held ahead of the institutional pricing on Thursday.
BAML priced the Harris County Cultural Education Facilities Finance Corp., Texas' $300 million of Series 2015 revenue bonds for the Houston Methodist Hospital. The bonds were priced as 4s and 5s to yield 4.24% and 3.92% in a split 2045 maturity. The bonds are rated AA by S&P.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 36,717 trades on Tuesday on volume of $6.808 billion.
The most active bond, based on the number of trades, was the Lehigh County General Purpose Authority, Pa., Series 2015A hospital revenue 4 1/4s of 2045, which traded 130 times at an average price of 99.893, an average yield of 4.243%. The bonds were initially priced at 97.352 to yield 4.41%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $1.93 billion to $10.87 billion on Wednesday. The total is comprised of $1.86 billion competitive sales and $9.01 billion of negotiated deals.
