Municipal bonds weakened as much as 8 basis points on Monday as the first of the week’s big offerings hit the screens, led by Connecticut’s competitive sales and the University of California’s negotiated deal.
The MBIS municipal non-callable 5% GO benchmark scale was weaker in late trading.
The 10-year muni benchmark yield rose to 2.290% on Monday from the final read of 2.261% on Friday, according to Municipal Bond Information Services. The MBIS 30-year benchmark muni yield increased to 2.743% from 2.709%.
The MBIS benchmark index is updated hourly on the Bond Buyer Data Workstation.
Top-rated municipal bonds finished weaker, as the yield on the 10-year benchmark muni general obligation rose six basis points to 2.01% from 1.95% on Friday, while the 30-year GO yield gained eight basis points to 2.64% from 2.56%, according to the final read of MMD’s triple-A scale.
U.S. Treasuries were weaker on Monday. The yield on the two-year Treasury gained to 1.83% from 1.80%, the 10-year Treasury yield rose to 2.39% from 2.38% and the yield on the 30-year Treasury increased to 2.78% from 2.77%.
On Monday, the 10-year muni-to-Treasury ratio was calculated at 84.3% compared with 82.2% on Friday, while the 30-year muni-to-Treasury ratio stood at 95.3% versus 92.4%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 41,552 trades on Friday on volume of $16.61 billion.
Prior week's actively traded issues
Revenue bonds comprised 55.93% of new issuance in the week ended Dec. 8, down from 55.98% in the previous week, according to Markit. General obligation bonds made up 38.20% of total issuance, down from 38.83%, while taxable bonds accounted for 5.87%, up from 5.19% a week earlier.
Some of the most actively traded bonds by type were from New York, Florida and New Jersey issuers.
In the GO bond sector, the New York City 4s of 2034 were traded 57 times. In the revenue bond sector, the Florida Development Finance Corp. 5.625s of 2047 were traded 116 times. And in the taxable bond sector, the New Jersey Turnpike Authority 3.729s of 2036 were traded 37 times.
Previous week's top underwriters
The top municipal bond underwriters of last week included Bank of America Merrill Lynch, JPMorgan Securities, Stifel, Wells Fargo Securities and RBC Capital Markets, according to Thomson Reuters data.
In the week of Dec. 3 to Dec. 9, BAML underwrote $2.30 billion, JPMorgan $2.15 billion, Stifel $2.05 billion, Wells $1.85 billion, and RBC $1.66 billion.
Action kicked off Monday in the competitive arena as Connecticut sold $850 million of bonds and notes in two offerings.
Goldman Sachs won the state’s $450 million of Series 2017A taxable general obligation bonds with a true interest cost of 3.2623%.
The issue was priced to yield from 2.30% at par in 2019 to 3.56% with a 3.75% coupon in 2028.
Three groups including Morgan Stanley, RBC Capital Markets and Wells Fargo Securities won the state’s $400 million of Series 2017A GO bond anticipation notes. Pricing information was not available.
The bonds are rated A1 by Moody’s Investors Service and A-plus by S&P Global Ratings and Fitch Ratings while the notes are rated MIG1 by Moody’s, SP1-plus by S&P and F1-plus by Fitch.
Howard County, Md., sold $238.9 million of bonds in two offerings.
Robert W. Baird won the $182.74 million of Series 107D consolidated public improvement refunding bonds with a TIC of 2.5134%. Pricing information was not available. Citi won the $56.16 million of Series 2017E metropolitan district refunding bonds with a TIC of 2.6753%.
Both deals are rated triple-A by Moody’s, S&P and Fitch.
In the negotiated sector on Monday, Barclays Capital priced for retail the Regents of the University of California’s $820.26 million of general revenue bonds.
The $749.57 million of Series AY tax-exempts were priced to yield from 1.51% with a 3% coupon in 2022 to 3.15% with a 3% coupon and 2.58% with a 5% coupon in a split 2037 maturity; a 2042 maturity was priced as 5s to yield 2.64%. No retail orders were taken in the 20+33-2036 maturities.
The $70.69 million of Series AZ taxable were priced to yield from about 40 basis points over the comparable Treasury security in 2022 to 110 basis points over the comparable Treasury security in 2032, 80 basis points over the comparable Treasury security in 2037 and 90 basis points over the comparable Treasury security in 2042.
The deal is rated Aa2 by Moody’s and AA by S&P and Fitch.
JPMorgan Securities priced and repriced the Phoenix Civic Improvement Corp.’s $467.98 million of Series 2017D junior lien airport revenue refunding bonds not subject to the alternative minimum tax.
The issue was repriced to yield from 1.70% with a 5% coupon in 2021 to 3.00% with a 5% coupon in 2037; a 2040 maturity was priced as 4s to yield 3.39%.
The deal is rated A1 by Moody’s and A-plus by S&P.
Morgan Stanley priced Nassau County, N.Y.’s $356.72 million of Series 2017C refunding general obligation improvements bonds.
The issue was priced to yield from 1.39% with a 2% coupon in 2018 to 3.14% with a 5% coupon in 2039.
The deal is rated A2 by Moody’s, A-plus by S&P and A by Fitch.
Morgan Stanley also priced and repriced the Board of Governors of the Colorado State University System’s $262.41 million of system enterprise revenue refunding bonds.
The $227.02 million of Series 2017C bonds were priced to yield from 1.19% with a 3% coupon in 2018 to 3.14% with a 4% coupon in 2038. A 2042 maturity was priced as 5s to yield 2.88% and a 2047 maturity was priced as 4s to yield 3.26%.
The $35.39 million of Series 2017D bonds were priced to yield from 1.31% with a 2% coupon in 2018 to 3.26% with a 4% coupon in 2038. A 2045 maturity was priced as 4s to yield 3.36%.
The Series 2017C bonds are subject to the insured state intercept program and rated Aa2 by Moody’s and AA-minus by S&P while the Series 2017D bonds are not subject to the insured state intercept program and are rated Aa3 by Moody’s and A-plus by S&P.
Bond Buyer 30-day visible supply at $23.47B
The Bond Buyer's 30-day visible supply calendar increased $1.51 billion to $23.47 billion on Monday. The total is comprised of $4.48 billion of competitive sales and $18.99 billion of negotiated deals.
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.