JPMorgan Securities priced California’s $2.15 billion of taxable general obligation bonds on Tuesday after taking indications of interest on the deal earlier in the day.

The deal's first tranche was priced as 2.60s to yield 2.523% in 202, as 2.80s to yield 2.798% in 2021, as 3 3/8s to yield 3.254% in 2025 and as 3 1/2s to yield 3.449% in 2028. The deal's second tranche was priced as 4 1/2s to yield 3.829% in 2033 and as 4.60s to yield 3.948% in 2038.

The Golden State taxable GOs are rated Aa3 by Moody’s Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings.

Underwriters said that sales were allowed outside of the United States in the European Economic Area, United Kingdom, Hong Kong, Canada, Switzerland, Singapore, Indonesia, Japan and Taiwan.

In other primary action on Tuesday, Goldman Sachs priced and repriced the District of Columbia Water and Sewer Authority’s $300 million of Series 2018A senior lien revenue green bonds on Tuesday. The deal is rated Aa1 by Moody’s and AAA by S&P.

Bank of America Merrill Lynch priced and repriced the Montgomery County Higher Education and Health Authority, Pa.’s $492.43 million of revenue bonds, taxable revenue bonds and variable-rate bonds for Thomas Jefferson University. The deal is rated A2 by Moody’s and A-plus by S&P.

Citigroup priced the Phoenix Union High School District No. 210, Ariz.’s $148.2 million of Series 2018 school improvement bonds, projects of 2011 and 2017. The deal is rated Aa2 by Moody’s, AA by S&P and AAA by Fitch.

In the competitive arena on Tuesday, Memphis, Tenn., sold $309.26 million of Series 2018 general obligation improvement bonds.

Bank of America Merrill Lynch won the bonds with a true interest cost of 3.5638%. The deal is rated Aa2 by Moody’s and AA by S&P.

Since 2008, Memphis has sold about $2.7 billion of bonds, with the most issuance in that period occurring in 2010, when it offered $870 million of securities. It sold the least amount of bonds during that time in 2013, when it issued $21.4 million.

Also Tuesday, the Virginia Public Buildings Authority sold $179.91 million of public facilities revenue bonds in two sales.

Jefferies won the $160.61 million of Series 2018A tax-exempts with a TIC of 2.7470%. Robert W. Baird won the $17.67 million of Series 2018B taxables with a TIC of 3.6274%. Both deals are rated AA-plus by Fitch.

Tuesday’s bond offerings

California:
Click here for the California pricing

Click here for the state’s taxable IOI wire

Washington:
Click here for the D.C. Water repricing

Click here for the D.C. Water deal

Arizona
Click here for the Phoenix UHSD No. 210 deal

Pennsylvania:
Click here for the Montgomery County deal

Tennessee:
Click here for the Memphis sale

Virginia
Click here for PBA sale

Municipals deal with stock volatility
Equity volatility overshadowed activity in the fixed-income markets, including municipals, according to one muni professional.

“The fixed-income market is incredibly quiet, relative to the equity market's volatility. That includes corporate — investment-grade and high-yield — government and municipal debt,” said David Tawil, president of Maglan Capital.

Others said supply challenges are still present but there could be improvement ahead.

“With large taxable issues, including California, topping this week's primary calendar, tax-free supply remains muted as it has for most of 2018, but this may be changing,” said Alan Schankel, managing director at Janney Capital Markets. “The 30-day visible supply is growing, reaching $13.7 billion this week, the highest since December's deluge of new issues rushed to market to beat potential year-end limitations on municipal issuance,” he said.

“We see limited upward pressure on longer maturity yields, although the tax-free yield curve continues to flatten, as the short end reacts to past and expected Fed rate hikes.”

Secondary market
Municipal bonds were slightly weaker on Tuesday, according to a late read of the MBIS benchmark scale.

Benchmark muni yields rose less than a basis point across all maturities in the one- to 30-year scale.

Yields calculated on MBIS’ AAA scale gained less than a basis point on almost all maturities in the one- to 30-year range except for the six-year maturity which slipped less than one basis point in yield.

Treasury bonds were stronger as the Dow Jones Industrial Average and S&P 500 Index both rose over 1% while the Nasdaq Composite Index gained more than 1.5%.

Previous session's activity
The Municipal Securities Rulemaking Board reported 32,727 trades on Monday on volume of $10.63 billion.

California, New York and Texas were the states with the most trades, with the Golden State taking 15.152% of the market, the Empire State taking 12.081% and the Lone Star State taking 10.107%.

Treasury sells $45B 4-week bills
The Treasury Department Tuesday auctioned $45 billion of four-week bills at a 1.630% high yield, a price of 99.873222. The coupon equivalent was 1.655%. The bid-to-cover ratio was 3.08.

Tenders at the high rate were allotted 25.14%. The median rate was 1.600%. The low rate was 1.570%.

Gary Siegel contributed to this report.

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.

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