The municipal market was focusing in on the last of the week’s larger new issues Wednesday, as Connecticut offered its general obligations to institutional investors.
“The focus throughout the morning should be on the extent of bid wanted lists as secondary market selling has been fairly robust lately and has caused municipals to cheapen versus Treasuries in our view,” according to Michael Pietronico, chief investment officer at Miller Tabak Asset Management. “The most interesting deal to the market should be the Connecticut State GO deal, which will likely be priced at a concession due to the fairly constant negative headlines about the state's finances.”
Thin supply has underwriters tripping over each other, according to David Tawil, president of Maglan Capital.
“Therefore, even though Connecticut may be a relatively troubled issuer and other issuers who are borrowing now wouldn’t normally get the market’s attention, the thin supply may end up being beneficial to them,” he said.
“On the other hand, we are solidly in a rising rate environment, and the stock market volatility has picked up massively in recent days, although corporate bond market volatility (both investment-grade and high-yield) has been pretty tame in comparison to the stock market.”
Loop Capital Markets priced Connecticut’s $620.37 million of GO and GO refunding bonds institutions after a one-day retail order period.
The deal is rated A1 by Moody’s Investors Service, A-plus by S&P Global Ratings and Fitch Ratings and AA-minus by Kroll Bond Rating Agency.
Since 2008, the Constitution state has sold about $32 billion of securities, with the most occurring in 2008 when it sold $4.21 billion and the least, excluding this year, in 2017 when it sold $1.54 billion.
Piper Jaffray priced the Prosper Independent School District, Texas’ $177.02 million of Series 2018 unlimited tax school building bonds.
The deal is backed by the Permanent School Fund Guarantee Program and rated triple-A by Moody’s and S&P.
Wednesday's bond deals
Prosper ISD, Texas:
Click here for the Prosper deal
Bond Buyer 30-day visible supply at $10.05B
The Bond Buyer's 30-day visible supply calendar decreased $935.7 million to $10.05 billion on Wednesday. The total is comprised of $2.99 billion of competitive sales and $7.06 billion of negotiated deals.
NYC MWFA plans $425M bond sale
The New York City Municipal Water Finance Authority said on Wednesday that it plans to sell $425 million of tax-exempt fixed rate bonds on Wednesday, April 4, after a one-day retail order period.
Proceeds from the sale will be used to refund certain outstanding bonds.
The bonds will be negotiated through the authority’s underwriting syndicate, led by book-running senior manager Siebert Cisneros Shank & Co., with Barclays and Raymond James serving as co-senior managers on the transaction.
Previous session's activity
The Municipal Securities Rulemaking Board reported 44,179 trades on Monday on volume of $11.68 billion.
California, New York and Texas were the states with the most trades, with the Golden State taking 15.673% of the market, the Empire State taking 11.726% and the Lone Star State taking 10.719%.
Treasury sells $15B 10-year FRNs
The Treasury Department Wednesday auctioned $15 billion of one-year 10-month floating rate notes with a high discount margin of 0.049%, at a zero spread, a price of 99.910268. The bid-to-cover ratio was 2.78.
Tenders at the high margin were allotted 47.55%.
The median discount margin was 0.028%. The low discount margin was 0.010%. The index determination date is March 26 and the index determination rate is 1.760%.
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.