The market saw a bevy of issues sell on Wednesday, as JPMorgan priced the biggest one of the week, the North Texas Tollway Authority's $866.52 million deal.
Prices of top-quality municipal bonds were a bit weaker at mid-session, traders said, with yields on some maturities up by as much as one basis point.
Primary Market
JPMorgan priced the largest deal of the week -- the North Texas Tollway Authority's $866.515 million toll road Series 2015A system second tier revenue refunding bonds.
The bonds are priced to yield from 0.43% with a 2% coupon in 2016 to 3.58% with a 5% coupon in 2035. A 2038 term bond was priced as 4s to yield 4.07%. This deal is rated A3 by Moody's Investors Service and BBB-plus by Standard & Poor's.
The authority has more than $1 billion of second-tier and $6.3 billion of first-tier bonds outstanding. Since 1997, the authority has sold a total of almost $13 billion of revenue bonds. The largest issuances were in 2008 and 2009 when $5.19 billion and $1.77 billion were sold, respectively. No bonds were sold in 1992, 2000-2002, 2004, 2006-2007 or 2013.
Morgan Stanley priced the New York State Dormitory's $682.73 million of Series 2015A revenue bonds for retail. The deal is priced to yield from 0.70% with a 3% coupon in 2017 to 3.00% with a 5% coupon in 2035. A 2038 term bond was priced as 4s to yield 3.47%; a 2041 term bond was priced at par with to yield 2.50%; a 2045 term bond was priced as 5s to yield 3.15% and a 4048 term bond was priced as 5s to yield 3.32%. The 2016 maturity was offered as a sealed bid. The NYU bonds are rated Aa3 by Moody's and AA-minus by S&P.
Going back to Texas, Piper Jaffray priced the Lone Star College System's $232.33 million deal in two series for Harris, Montgomery and San Jacinto counties. The $134.87 million Series 2015A of limited tax general obligation bonds were priced to yield from 1.45% with a 4% coupon in 2020 to 3.04% with a 5% coupon in 2037. A 2040 term bond was priced as 5s to yield 3.09%. The $97.46 million of Series 2015B limited tax GO refunding bonds were priced to yield from 1.45% in a split maturity in 2020 with 2% and 5% coupons to 2.71% with a 4% coupon in 2027. The deal is rated triple-A by S&P.
In the competitive arena, North Carolina sold $231.36 million of general obligation bonds. Wells Fargo won the deal with a true interest cost of 2.5954%. The bonds are priced as 5s to yield from 0.25% in 2016 to 2.05% in 2026 and to yield from 2.70% with a 3.25% coupon in 2028 to 3.00% with a 4% coupon in 2035. The deal is rated triple-A by Moody's, S&P and Fitch Ratings. North Carolina last sold bonds on April 16, 2014, when Morgan Stanley won $206.69 million of Series 2014A GO refunding bonds with a TIC of 1.8035%.
Bank of America Merrill Lynch won the bidding war for Howard County, Md.'s $178.42 million of Series 2015A GO consolidated public improvement project and refunding bonds with a TIC of 2.6606%. The bonds are priced to yield from 0.19% with a 5% coupon in 2016 to 3.05% with a 4% coupon in 2035. The deal is rated triple-A by Moody's, S&P and Fitch.
Secondary Market
Prices of top-quality munis were slightly weaker on Wednesday. The yield on the 10-year benchmark muni general obligation was up as much as one basis point from 1.92% on Tuesday , while the yield on 30-year GO was also up by as much as a basis point, from 2.80%, according to a read of MMD's triple-A scale.
Treasury prices were lower on Wednesday. The yield on the two-year Treasury note was at 0.53%, slightly up from Tuesday's 0.52%, while the 10-year yield moved up to 1.92% from 1.89% and the 30-year yield increased to 2.55% from 2.52%.
On Tuesday, the 10-year muni to Treasury ratio was calculated at 101.5% versus 100.4% on Monday, while the 30-year muni to Treasury ratio stood at 110.8% compared to 108.7%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $561.6 million to $11.125 billion on Wednesday. The total is comprised of $4.176 billion competitive sales and $6.948 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,236 trades on Tuesday on volume of $8.009 billion. Most active, based on the number of trades, was the Boise-Kunda Irrigation Distrist, Idaho's Arrowrock Hydroelectric Project Series 2015 revenue refunding 4s of 2039, which traded 175 times at an average price of 100.574 with an average yield of 3.916%. The bonds were initially priced at 98.176 to yield 4.12%.
