The municipal bond market was set for a second wave of new issues to hit the screens on Wednesday.
Secondary Market
U.S. Treasuries were narrowly mixed on Wednesday. The yield on the two-year Treasury was flat from 0.72% on Tuesday, while the 10-year Treasury yield inched up to 1.74% from 1.73% and the 30-year Treasury bond yield rose to 2.57% from 2.55%.
Top-rated municipal bonds finished stronger on Tuesday. The yield on the 10-year benchmark muni general obligation fell seven basis points to 1.63% from 1.70% on Monday, while the 30-year muni yield dropped seven basis points to 2.61% from 2.68%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Tuesday at 94.5% compared with 95.7% on Monday, while the 30-year muni to Treasury ratio stood at 102.4% versus 102.3%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 38,383 trades on Tuesday on volume of $11.09 billion.
The Primary Market
Jefferies is set to price the University of Connecticut’s $340.62 million of general obligation bonds to retail investors after a two-day retail order period.
The $259.43 million of Series 2016A GOs were priced on Tuesday for retail to yield from 1.09% with 4% and 5% coupons in a split 2019 maturity to 3.21% with a 4% coupon in 2036. No retail orders were taken in the 2029-2032 or 2034-2035 maturities. The 2017 and 2018 maturities were offered as sealed bids.
The $81.19 million of Series 2016A refunding GOs were priced for retail as 5s to yield from 1.09% in 2019 to 2.32% in 2027. The 2017 and 2018 maturities were offered as sealed bids.
The issue is rated Aa3 Moody’s Investors Service, AA by Standard & Poor’s and AA-minus by Fitch Ratings.
Citigroup is set to price the Tarrant County, Texas, Cultural Education Facilities Corp.’s $372 million of tax-exempt hospital revenue bonds for Baylor Scott & White Health. The deal is part of a $912 million issue which also consists of $540 million of taxable corporate CUSIP bonds. The bonds are rated Aa3 by Moody’s and AA-minus by S&P.
HilltopSecurities is expected to price the Eagle Mountain-Saginaw Independent School District, Texas’ $156.91 million of unlimited tax refunding bonds. The issue is rated triple-A by S&P.
Raymond James is set to price Southaven, Miss.’ $133.43 million of combined water and sewer system revenue refunding bonds. The issue is rated AA-minus by S&P.
In the competitive arena, Elk Grove, Calif., is set to sell $106.8 million of Series 2016 capital facilities project certificates of participation. The COPs, which are insured by Build America Mutual, are rated AA by S&P.
On Thursday, Wells Fargo Securities is expected to price the Los Angeles Department of Water and Power’s $550 million of Series 2016A water system revenue bonds. Last week, S&P raised LADWP’s water revenue bond rating to AA-plus from AA. Moody’s and Fitch affirmed their ratings at Aa2 and AA, respectively. All three ratings agencies assign stable outlooks to the credit.
Since 2006, LADWP has sold about $11.73 billion of bonds with the most occurring in 2010 when it sold $2.06 billion of bonds. The department saw the lowest year of issuance in 2006, when it issued $482 million.
Wells will also price on Thursday the Regents of the University of California’s $842 million of general revenue bonds consisting of Series AR and AT and taxable Series AS and AU. The issue is rated Aa2 by Moody’s and AA by S&P and Fitch.
And Morgan Stanley will price the Dormitory of the State of New York’s $149.79 million issue. DASNY’s Series 2016A revenue bonds are being issued for Fordham University.
NYC TFA Plans $750M Competitive Sale
The New York City Transitional Finance Authority will be coming to market on April 12 with a competitive sale of $750 million future tax secured subordinate bonds.
The TFA’s fixed-rate new-money bonds will consist of $500 million of tax-exempt bonds and $250 million of taxables.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $1.04 billion to $9.43 billion on Wednesday. The total is comprised of $2.24 billion of competitive sales and $7.20 billion of negotiated deals.
