Prices of top-rated municipal bonds were steady to slightly weaker at mid-session, according to traders, as lots of new deals came to market, led off by two competitive sales totaling over $500 million from Nevada's Clark County School District.
Secondary Market
The yield on the 10-year benchmark muni general obligation was as much as one basis point stronger from 2.06% on Monday, while the yield on the 30-year GO was steady at 3.08%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were lower on Tuesday, with the yield on the two-year Treasury rising to 0.77% from 0.75% on Monday, while the 10-year yield gained to 2.20% from 2.18% and the 30-year yield increased to 2.98% from 2.95%.
The 10-year muni to Treasury ratio was calculated on Monday at 94.4% versus 93.8% on Friday, while the 30-year muni to Treasury ratio stood at 104.3% compared to 103.5%, according to MMD.
Primary Market
JPMorgan Securities won the Clark County School District's $341.8 million of Series 2015C limited tax general obligation building and refunding bonds with a true interest cost of 3.06%. Pricing details were not immediately available.
JPMorgan also won the $200 million of Series 2015D limited tax GO school bonds additionally secured by pledged revenues with a TIC of 3.22%. The bonds were priced to yield from 0.28% with a 5% coupon in 2016 to 3.68% with a 4% coupon in 2035.
The bonds were rated A1 by Moody's Investors Service and AA-minus by Standard & Poor's.
The school district, which enrolls over 320,000 students, has almost $2.9 billion of outstanding debt. Since 2005 the district has sold nearly $6 billion of bonds. The most issuance occurred in 2005 and 2007, when the district sold $980 million and $1.12 billion, respectively. The least amount of issuance took place in 2011 and 2013, when the school district sold $99 million and $128.7 million, respectively.
Before Tuesday's sale, the district last sold comparable bonds on Feb. 24 when Bank of America Merrill Lynch won $258 million of Series 2015A GOLT refunding bonds with a TIC of 1.05%.
On the competitive short-term slate, the Louisville and Jefferson County, Ky., Metropolitan Sewer District sold $226 million of Series 2015 sewer and drainage system subordinated bond anticipation notes. No information was immediately available. The BANs, which are due Nov. 22, 2016, were rated MIG-1 by Moody's. Before Tuesday's sale, the district last sold BANs on Nov. 4, 2014, to BAML, which won the Series 2014 notes with a TIC of 0.29%.
Wells Fargo Securities priced San Antonio, Texas' $235 million of new Series 2015 electric and gas system revenue bonds. The issue was priced to yield from 2.41% with a 5% coupon in 2026 to 3.66% with a 4% coupon in 2039. The bonds were rated Aa1 by Moody's, AA by S&P and AA-plus by Fitch Ratings.
Citigroup priced San Antonio's $100 million of Series 2015C variable-rate junior lien electric and gas systems revenue bonds. The issue has a maturity date of Dec. 1, 2045, and a mandatory put date of Dec. 1, 2019. The bonds were priced as 3s to yield 1.36%. The issue was rated Aa2 by Moody's, AA-minus by S&P and AA-plus by Fitch. The bonds have a "step rate," so if there is a failure by the remarketing agent to remarket the issue on the put date, it will not result in default but rather the bonds will then bear an interest rate of 8% a year.
Bank of America Merrill Lynch priced the Los Angeles Municipal Improvement Corp.'s $297.71 million of Series 2015A taxable convention center lease revenue refunding bonds. The bonds were priced at par to yield from 115 basis points above the comparable Treasury security in 2017 to 163 basis points above the comparable Treasury security in 2022. The issue was rated A-plus by S&P and Fitch.
Loop Capital Markets priced for retail investors the New York Triborough Bridge and Tunnel Authority's $156.32 million of general revenue bonds for the MTA bridges and tunnels, Series 2015B and Subseries 2008B-3.
The $65 million of Series 2015B bonds were priced to yield from 0.57% with a 5% coupon in 2017 to 3.18% with a 5% coupon in 2035. A 2040 maturity was priced as 5s to yield 3.36% and a 2045 maturity was priced as 5s to yield 3.43%; a 2016 maturity was offered as a sealed bid.
The $91.32 million of Subseries 2008B-3 bonds were priced as a remarketing as 5s to yield 2.62% in 2027 and 2.73% in 2028 and from 3.08% in 2033 to 3.32% in 2038.
The issue was rated Aa3 by Moody's, AA-minus by S&P and Fitch and AA by Kroll Bond Rating Agency.
JPMorgan priced for retail investors Anchorage, Alaska's $310.44 million of GO and GO refunding bonds.
The $45.38 million of Series A general purpose GOs were priced to yield from 0.56% with a 3% coupon in 2017 to 3.06% with a 5% coupon in 2035. The $115.95 million of Series B general purpose GO refunding bonds was not offered to retail investors.
The issue was rated triple-A by S&P and AA-plus by Fitch.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 30,635 trades on Monday on volume of $5.50 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $63.8 million to $10.01 billion on Tuesday. The total is comprised of $3.69 billion competitive sales and $6.32 billion of negotiated deals.
