The municipal bond market is set for more new issuance to hit the screens, with a big California issue slated one day after the massive Ascension Health Alliance deal was priced.
Secondary Market
U.S. Treasuries were slightly stronger on Wednesday. The yield on the two-year Treasury decreased to 0.85% from 0.86% on Tuesday, while the 10-year Treasury yield fell to 1.91% from 1.93% and the yield on the 30-year Treasury bond dipped to 2.74% from 2.75%.
Top quality municipal bonds finished weaker on Tuesday. The yield on the 10-year benchmark muni general obligation rose one basis point to 1.66% from 1.65% on Monday while the 30-year muni yield increased two basis points to 2.63% from 2.61%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 86.0% on Tuesday compared with 86.8% on Monday, while the 30-year muni to Treasury ratio stood at 95.4% versus 95.8%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,945 trades on Tuesday on volume of $8.94 billion.
Primary Market
On Wednesday, Bank of America Merrill Lynch is set to price the California Statewide Communities Development Authority’s $883 million of Series 2016A revenue bonds for the Loma Linda University Medical Center on Wednesday.
The deal is rated BB by Standard & Poor’s and BB-plus by Fitch Ratings.
Since 2006, the SCDA has sold over $22 billion of debt, with over $4 billion of bonds sold in 2007, 2008 and 2009. The least amount of issuance was in 2013 when the authority sold $516 million of bonds.
Also on Wednesday, Citigroup is expected to price $272 million of senior lien revenue bonds for the Blueridge Transportation Group’s 288 Toll Lanes Project. The deal is rated Baa3 by Moody’s Investors Service and triple-B-minus by S&P.
And RBC Capital Markets is set to price the Mountain View Whisman School District, Santa Clara County, Calif.’s $148 million of Election of 2012 Series B general obligation bonds. The deal is rated triple-A by Moody’s and AA by S&P.
On Tuesday, Morgan Stanley priced and repriced Ascension Health Alliance’s $1.2 billion healthcare deal through four conduit issuers for the Ascension Senior Credit Group. The Wisconsin Health & Educational Facilities Authority’s $1.02 billion of Series 2016A revenue bonds were repriced to yield from 0.75% with a 3% coupon in 2018 to 3.25% with a 3.125% coupon, 3.15% with a 4% coupon and 2.75% with a 5% coupon in a 2036 triple-split maturity. A 2039 triple-split maturity was priced with 4%, 4.50% and 5% coupons to yield 3.24%, 3.04% and 2.84% respectively. A 2046 term bond was priced as 4s to yield 3.35%.
The Alabama Special Care Facilities Authority of Birmingham’s $73.15 million of Series 2016B revenue bonds were priced as 5s to yield 2.98% in a 2046 bullet maturity. The Alabama Special Care Facilities Authority of Mobile’s $87.89 million of Series 2016C revenue bonds were priced as 5s to yield 2.98% in a 2046 bullet maturity.
The Michigan Finance Authority’s $65.63 million of Series 2016E-1 hospital project and refunding revenue bonds were repriced at par to yield 1.10% in a 2046 bullet maturity.
The deal was rated Aa2 by Moody’s, and AA-plus by S& P and Fitch.
Piper Jaffray received the official award on the Ohlone Community College District, Alameda County, Calif.’s $155 million Election of 2010 Series C GOs. The issue was priced to yield from 0.50% with a 2% coupon in 2016 to 3.17% with a 3% coupon in 2038; a 2041 term bond was priced as 4s to yield 2.98% and a 2045 term was priced as 4s to yield 3.03%. The deal was rated Aa2 by Moody’s and AA by Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $3.84 billion to $9.33 billion on Wednesday. The total is comprised of $4.05 billion of competitive sales and $5.28 billion of negotiated deals.
