Muni market sees new deals, looks ahead to N.J.'s $3.2B tobacco next week

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Municipal bond market participants are seeing much needed supply hit the screens on Tuesday as buyers look ahead to next week’s huge tobacco bond deal from New Jersey.

Jefferies will price the biggest bond deal of the year to date when it brings the New Jersey Tobacco Settlement Financing Corp.’s $3.22 billion of Series 2018A senior and Series 2018B subordinate tobacco settlement bonds to market next Wednesday.

The deal will refund all of the corporation’s outstanding tobacco bonds, which were issued in 2007.

The issue will carry various ratings depending upon series and maturity.

Primary market
On Tuesday, Loop Capital Markets priced Connecticut’s $617 million of GO and GO refunding bonds for retail investors on Tuesday ahead of the institutional pricing on Wednesday.

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.

RBC Capital Markets priced Ohio’s $369.57 million of Series 2018-1 grant anticipation revenue vehicle bonds. The bonds will finance 24 highway and bridge projects.

The deal is rated Aa2 by Moody’s and AA by S&P.

Since 2008, the Buckeye state has sold about $11.95 billion of securities, with the most occurring in 2008 when it sold $2.13 billion and the least in 2013 when it sold $259 million.
Barclays Capital is scheduled to price George Washington University’s $793 million of Series 2018 taxable corporate CUSIP bonds on Tuesday. The deal is rated A1 by Moody’s Investors Service and A-plus by S&P.

Morgan Stanley is slated to price $1.29 billion of bonds in two deals for Sutter Health on Tuesday. The issues consist of a $684.48 million taxable corporate CUSIP deal and a $606.26 million tax-exempt sale.

The tax-exempts will be sold through the California Health Facilities Financing Authority while the taxables will be sold directly by Sutter Health. The deals are rated Aa3 by Moody’s, AA-minus by S&P and A-plus by Fitch.

In the competitive arena on Tuesday, Oklahoma City sold $123.74 million of general obligation bonds.

Citigroup won the $82.75 million of Series 2018 tax-exempt GOs with a true interest cost of 3.1659%. Raymond James won the $40.99 million of Series 2018 taxable GOs with a TIC of 3.4092%.

The deals are rated triple-A by Moody’s and S&P.

Tuesday's bond deals

Click here for Connecticut retail pricing

Click here for Ohio bond deal

Bond Buyer 30-day visible supply at $10.99B
The Bond Buyer's 30-day visible supply calendar increased $3.33 billion to $10.99 billion on Tuesday. The total is comprised of $3.11 billion of competitive sales and $7.88 billion of negotiated deals.

Previous session's activity
The Municipal Securities Rulemaking Board reported 38,452 trades on Monday on volume of $10.01 billion.

California, New York and Texas were the states with the most trades, with the Golden State taking 15.203% of the market, the Empire State taking 9.864% and the Lone Star State taking 9.129%.

Treasury auctions
The Treasury Department Tuesday auctioned $24 billion of 364-day bills at a 2.070% high yield, a price of 97.907000. The coupon equivalent was 2.132%. The bid-to-cover ratio was 2.99. Tenders at the high rate were allotted 80.28%. The median yield was 2.030%. The low yield was 1.995%.

Treasury also auctioned $65 billion of four-week bills at a 1.705% high yield, a price of 99.867389. The coupon equivalent was 1.731%. The bid-to-cover ratio was 2.71.
Tenders at the high rate were allotted 57.88%. The median rate was 1.670%. The low rate was 1.645%.

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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Primary bond market Secondary bond market State of California State of New York State of Texas State of Connecticut State of New Jersey New Jersey Tobacco Settlement Finance Corp. George Washington University California Health Facilities Financing Authority Oklahoma State Bond Advisor