Education deals from Connecticut and Ohio came to the municipal market Wednesday amid concern over low volume and inactivity.
JPMorgan Securities priced and repriced the University of Connecticut’s $275 million of Series 2018A general obligation bonds.
The deal is rated A1 by Moody’s Investors Service, AA-minus by S&P Global Ratings and A by Fitch Ratings.
Wells Fargo Securities priced and repriced the Ohio Higher Educational Facility Commission’s $117.89 million of Series 2018 A and B revenue bonds for the University of Dayton project. The deal is rated A2 by Moody’s and A-plus by S&P.
JPMorgan received the written award on the California $2.2 billion of taxable general obligation bonds.
Loop Capital Markers received the written award on the Galena Park Independent School District, Texas’ $100.23 million of Series 2018 unlimited tax school building and refunding bonds.
In the competitive arena on Wednesday, Tennessee sold $191.43 of bonds in two sales.
Morgan Stanley won the $154.36 million of Series 2018A general obligation bonds with a true interest cost of 2.9989%. Goldman Sachs won the $35.57 million of refunding Series 2018B GOs with a TIC of 1.9518%.
The deals are rated triple-A by Moody’s, S&P and Fitch.
Since 2008, the Volunteer State has sold almost $3.5 billion of bonds, with the most issuance occurring in 2009 when it sold $679.6 million of securities. The state did not come to market in 2013 or 2017.
Wednesday’s bond offerings
Click here for the UConn pricing
Click here for the $154M state sale
Click here for the California written award
“The muni market is a primary-focused market right now, but the market continues to feel heavy,” said one Mid-Atlantic trader. “With ongoing secondary selling and on top of that the full ramifications of the Trump tax bill haven’t played out yet.”
Low volume and inactivity continued to plague many on the buyside of the municipal market, according to some market participants. A New Jersey trader said Wednesday was like any other day in recent months — quiet on the retail front with institutional investors dominating what little primary market activity existed.
“The market continues to be in a limited new-issue market,” he said. “With the small supply, the action in the Street is against the new issues, with some dealers swapping against new issues, but it’s almost exclusively an institutional market.”
He lamented the lackluster activity on the retail side won’t improve unless there is a boost of new-issue supply or forced selling to jump-start activity.
“Forced selling is just not out there at all,” he explained. “No one is buying anything in the secondary market and no one is selling anything,” he said of his retail crowd of clients. “It’s really only about the new issues,” he said.
The trader, who has more than 30 years of experience and began his career before computers were used on trading desks, said the inactivity has brought an unprecedented fear to the municipal market.
“It’s a dangerous market,” he said. “The inactivity is going to cost people their jobs. I’ve been in a lot of different markets and seen a lot of different changes. To see what’s out there today and the way this business is, I have never seen it like this.”
Municipal bonds were mixed on Wednesday, according to a late read of the MBIS benchmark scale. Benchmark muni yields rose less than a basis point in the two- to six-year, eight- to 11-year and 14- to 20-year maturities and fell in one-year, seven-year, 12- to 13-year and 21- to 30-year maturities.
Yields calculated on MBIS’ AAA scale were also mixed and gained less than a basis point in the two- to five-year, nine- to 10-year and 14- to 30-year maturities and fell less than a basis point in one-year, six- to eight-year and 11- to 13-year maturities.
Treasury bonds were weaker as the Dow Jones Industrial Average, S&P 500 Index and Nasdaq Composite Index were little changed in late trade.
Previous session's activity
The Municipal Securities Rulemaking Board reported 45,903 trades on Tuesday on volume of $12.34 billion.
California, New York and Texas were the states with the most trades, with the Golden State taking 16.66% of the market, the Empire State taking 13.32% and the Lone Star State taking 10.429%.
Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation. Click here for a brief tour of the Workstation, or contact Vanessa Kim at 212-803-8474 for more information.