Prices of top-quality municipal bonds were stronger at mid-session, traders said, with yields on some maturities down by as much as two basis points. Meanwhile in the primary, the big Albuquerque water deal was priced.
The municipal bond market remains in wait-and-see mode ahead of the Federal Open Market Committee’s statement on monetary policy, followed by a summary of its economic projections and a press conference with Chair Janet Yellen.
Secondary Market
The yield on the 10-year benchmark muni general obligation dropped as much as two basis points from 2.09% on Tuesday, while the yield on 30-year GO declined as much as two basis points from 2.90%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were mixed on Wednesday. The yield on the two-year Treasury note rose to 0.67% from 0.66% on Tuesday, while the 10-year yield decreased to 2.02% from 2.06% and the 30-year yield dropped to 2.57% from 2.62%.
On Tuesday, the 10-year muni to Treasury ratio was calculated at 101.7% versus 101.0% on Monday, while the 30-year muni to Treasury ratio stood at 110.9% compared to 109.2%.
Primary Market
J.P. Morgan Securities priced the biggest deal of the day the Albuquerque Bernalillo county water utility authority’s $204.72 million of Senior Lien water and sewer system refunding and improvement revenue bonds.
The bonds are priced to yield from 0.74% with a 4% coupon in 2017 to 3.37% with a 5% coupon in 2033. The issue is rated Aa2 by Moody’s Investors Service, AA-plus by Standard and Poor’s and AA by Fitch Ratings.
Late on Tuesday, Citigroup Global Markets received the official award on the state of Oregon's $253.58 million of general obligation bonds, issued under Article XI-Q for state projects.
The bonds were priced in three series following a retail order period Monday. The $171.595 Series F bonds were priced as to yield from 0.193% with a 2% coupon in 2016 to 2.94% with a 5% coupon in 2035; a 2039 term bond was priced as 5s to yield 3.02%. The $72.86 million Series H refunding bonds were priced to yield from 1.45% with a 5% coupon in 2020 to 2.46% with a 5% coupon in 2027. The $9.125 million Series I refunding bonds were priced to yield from 1.56% with a 3% coupon in 2020 to 2.51% with a 5% coupon in 2027. The deal is rated Aa1 by Moody's and AA-plus by both S&P and Fitch.
Since 1995, the Beaver State has sold roughly $6.084.3 billion of bonds. The highest issuances came in 2003 and 2013, with $2.205 billion sold and $719.1 million, respectively. The lowest issuances occurred in 1995 and 2004, when the state sold $13.5 million and $58.1 million, respectively.
The largest competitive bond sale of the week was sold on Wednesday the Omaha Public School District No. 001, Neb.’s $141 million of Series 2015 GOs. The deal was won by JPMorgan with a true interest cost of 3.4189% No other information was immediately available. The bonds were rated Aa1 by Moody’s and triple-A by S&P.
The school district last sold bonds competitively on July 11, 2001, when Merrill Lynch won $100 million of Series 2001B GOs with a true interest cost of 5.0372%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $2.082 billion to $8.571 billion on Wednesday. The total is comprised of $2.852 billion competitive sales and $5.720 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,100 trades on Tuesday on volume of $9.451 billion.
Most active on Tuesday, based on the number of trades, was the North Carolina Medical Care Commission Series 2015 healthcare facilities revenue bonds for Vidant Health 4s of 2034, which traded 335 times at an average price of 99.992 with an average yield of 4.0%; (initial offering price of 100.00 and an initial offering yield of yield of 4.0%).
