Competitive sales from the states of Washington and Wisconsin along with negotiated deals from New York and Illinois issuers dominated Tuesday’s new issue slate.

In secondary trading, municipal bonds finished slightly weaker.

Primary market
In the competitive arena, Washington State sold $742.65 million of Series R-2018C various purpose general obligation refunding bonds on Tuesday. Bank of America Merrill Lynch won the bonds with a true interest cost of 2.75%.

The issue was priced as 5s to yield from 1.05% in 2018 to 2.72% in 2035. The deal is rated Aa1 by Moody’s Investors Service and AA-plus by S&P Global Ratings and Fitch Ratings.

Since 2007, the Evergreen State has issued almost $30 billion of bonds, with the most issuance occurring in 2012 when it sold $3.51 billion of debt. Prior to this year, the state sold the least amount of bonds in 2008, when it issued $1.83 billion.

Wisconsin sold $272.67 million of Series 2017B GOs. Wells Fargo Securities won the bonds with a TIC of 3.446%.

The issue was priced to yield from 1.25% with a 5% coupon in 2019 to 2.43% with a 5% coupon in 2038. The deal is rated Aa1 by Moody’s, AA by S&P and AA-plus by Fitch.

In the negotiated sector, Citigroup priced the Metropolitan Pier and Exposition Authority’s $496 million of McCormick Place expansion project and expansion project refunding bonds.

The $248.16 million of Series 2017A bonds consisted of $190 million of bonds priced as 5s to yield 4.50% in 2057 and $58.16 million of zeros coupon capital appreciation bonds priced to yield 5.25% in 2056.

The $247.85 million of Series 2017B refunding bonds were priced as 5s to yield from 3.40% in 2025 to 4.19% in 2034. They were also structured as zero coupon CABs to yield 4.75% in 2037, 4.875% in 2042, 5% in 2048, 5.25% in 2053, 5.50% in 2054, and 4.60% in 2056.

The deal is rated BB-plus by S&P and BBB-minus by Fitch except for the Series 2017B CABs 2056 maturity which is insured by Assured Guaranty Municipal and rated AA by S&P.

Barclays Capital priced the New York City Municipal Water Finance Authority’s $398.52 million of Fiscal 2018 Series CC water and sewer system second general resolution revenue bonds for institutions after holding a one-day retail order period.

The $338.96 million of Subseries CC-1 bonds were priced as 3s to yield approximately 3.103% and as 4s to yield 3.03% in a split 2037 maturity and as 4s to yield 3.19% and as 5s to yield 2.92% in a split 2048 maturity.

The $59.56 million of Subseries CC-2 bonds were priced as 5s to yield 1.57% in 2024 and 1.65% in 2025.

The deal is rated Aa1 by Moody’s and AA-plus by S&P and Fitch.

JPMorgan Securities priced Norfolk, Va.’s $162.73 million of general obligation capital improvement and refunding bonds.

The $103.54 million of Series 2017A tax-exempt GO CIBs were priced to yield from 1.24% with a 3% coupon in 2019 to 2.41% with a 5% coupon in 2037. The $59.19 million of Series 2017C tax-exempt GO refunding bonds were priced to yield from 1.12% with a 2% coupon in 2018 to 2.91% with a 4% coupon in 2036; a 2042 maturity was priced as 5s to yield 2.78%.

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

Siebert Cisneros Shank priced Tallahassee, Fla.’s $115.41 million of Series 2017 consolidated utility systems refunding bonds on Tuesday.

The issue was priced as 5s to yield from 1.16% in 2018 to 2.42% in 2037. The deal is rated AA by S&P and AA-plus by Fitch.

Wells Fargo priced the Champaign County Community Unit School District No. 4, Ill.’s $110 million of Series 2017 GO school building bonds.

The issue was priced to yield from 1.37% with a 4% coupon in 2019 to 2.73% with a 5% coupon in 2031. The deal is rated Aa2 by Moody’s and AA by S&P.

Morgan Stanley priced the New Jersey Educational Facilities Authority’s $183.84 million of Series 2017C taxable revenue refunding bonds.

The issue was priced at par to yield from about 45 basis points over the comparable Treasury security in 2020 to about 140 basis points over the comparable Treasury security in 2032 and about 110 basis points over the comparable Treasury security in 2036. The deal is rated A2 by Moody’s and A-minus by S&P.

Municipal CUSIP requests rose 9% in October
Total municipal CUSIP requests increased to 1,219 in October, up 9% from September’s count of 1,147, CUSIP Global Services reported on Tuesday.

Last month, 1,018 municipal bond identifier requests were made last month, up from September’s bond count of 934. Long-term muni note CUSIP requests fell to 44 last month compared to 52 in September while short-term muni note CUSIP demand dropped to 107 in October from 115 in September.

Through October 2017, total municipal security CUSIP orders for all asset classes was 12,448, down 21% from year ago results of 15,739 orders

"While we are seeing some month-to-month pockets of growth in municipal bond and corporate equity asset classes, the overall pace of pre-market activity in October is best categorized as sluggish," said Gerard Faulkner, director of operations for CUSIP Global Services. "This pattern of on-again/off-again monthly volume ebbs and flows has been consistent this year amid a great deal of macroeconomic and geopolitical uncertainty."

On a year-over-year basis, municipal request volume is down 25% through the end of October, reflecting ongoing volatility in municipal issuance volumes over the course of this year.

“There is an alchemy to new security issuance that involves equal parts macroeconomics, politics, and routine funding needs of corporations and municipalities," said Richard Peterson, senior director at S&P Global Market Intelligence. "As those three variables continue to fluctuate over the course of the year, we're seeing those same undulations in the pre-trade market where issuers are readying new instruments to bring to market. We expect that general sense of cautiousness to pervade new issuance activity for the near-term."

Secondary market
The yield on the 10-year benchmark muni general obligation rose one basis point to 2.00% from 1.99% on Monday, while the 30-year GO yield gained one basis point to 2.70% from 2.69%, according to the final read of Municipal Market Data’s triple-A scale.

U.S. Treasuries were mixed on Tuesday. The yield on the two-year Treasury was unchanged from 1.69%, the 10-year Treasury yield declined to 2.38% from 2.40% and the yield on the 30-year Treasury decreased to 2.84% from 2.87%.

On Tuesday, the 10-year muni-to-Treasury ratio was calculated at 84.1% compared with 80.6% on Monday, while the 30-year muni-to-Treasury ratio stood at 95.3% versus 92.6%, according to MMD.

AP-MBIS 10-year muni at 2.296%, 30-year at 2.807%
The Associated Press-MBIS municipal non-callable 5% GO benchmark scale was mixed in late trading.

The 10-year muni benchmark yield rose to 2.296% on Tuesday from the final read of 2.290% on Monday, according to Municipal Bond Information Services, a national consortium of municipal interdealer brokers. The AP-MBIS 30-year benchmark muni yield fell to 2.807% from 2.808%.

The AP-MBIS benchmark index is a yield curve built on market data aggregated from MBIS member firms and is updated hourly on the Bond Buyer Data Workstation.

MSRB: Previous session`s activity
The Municipal Securities Rulemaking Board reported 34,488 trades on Monday on volume of $7.62 billion.

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