Top quality municipal bonds finished weaker on Wednesday, traders said, as more large deals hit their screens.

Primary market
Siebert Cisneros Shank & Co. held a second day of retail orders for New York City’s $855.56 million of Fiscal 2018 Subseries B-1 and Series 1 general obligation bonds ahead of the institutional pricing on Thursday.

The $550 million of the Subseries B-1 bonds were priced on Wednesday for retail to yield 0.91% with a 3% in 2019, 1.05% with a 4% coupon in 2020, 3.08% with a 3% coupon in 2034, 2.71% with a 5% coupon in 2035, 3.01% with a 4% coupon in 2036, 3.18% with a 4% coupon in 2040 and 3.36% with a 3.25% coupon in 2042. No retail orders were taken in the 2030-2033, 2037-2039 or 2041 maturities.

The $305.56 million of Series 1 bonds were priced as a remarketing for retail on Wednesday to yield from 1.03% with a 2% coupon in 2020 to 2.60% with a 5% coupon in 2033.

The deal is rated Aa2 by Moody’s Investors Service and AA by S&P Global Ratings and Fitch Ratings.

RBC Capital Markets priced the Regents of the University of Minnesota’s $411.72 million of tax-exempt Series 2017A general obligation bonds and Series 2017B GO refunding bonds on Wednesday.

The $118.89 million of Series 2017A bonds were priced to yield from 0.89% with a 4% coupon in 2019 to 2.81% with a 5% coupon in 2042.

The $292.84 million of Series 2017B bonds were priced to yield from 0.90% with a 5% coupon in 2019 to 3.14% with a 3.125% coupon in 2036. A 2018 maturity was offered as a sealed bid.

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

Barclays Capital priced Colorado Springs, Colo.’s $239.82 million of Series 2017A-1, 2017A-2 and 2017A-3 utilities system refunding revenue bonds on Wednesday.

The $88.87 million of Series 2017A-1 bonds were priced to yield from 0.80% with a 3% coupon in 2018 to 2.84% with a 4% coupon in 2033; a 2042 maturity was priced as 3 1/8s to yield 3.36%.

The $84.97 million of Series 2017A-2 bonds were priced to yield from 0.80% with a 4% coupon in 2018 to 2.18% with a 5% coupon in 2028 and from 2.36% with a 5% coupon in 2030 to 2.74% with a 5% coupon in 2037. A 2042 maturity was priced as 5s to yield 2.88% and a 2047 maturity was priced as 5s to yield 2.95%.

The $65.99 million of Series 2017A-3 bonds were priced as 5s to yield from 0.80% in 2018 to 1.44% in 2023.

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

Raymond James & Associates priced Memphis, Tenn.’s $155 million of Series 2017 electric, gas and water systems revenue bonds.

The $90 million of electric system revenue bonds were priced to yield from 0.81% with a 3% coupon in 2018 to 3.17% with a 3.50% coupon in 2037.

The $40 million of gas system revenue bonds were priced to yield from 0.81% with a 3% coupon in 2018 to 3.02% with a 4% coupon in 2037.

The $25 million of water system revenue bonds were priced to yield from 0.78% with a 2% coupon in 2018 to 3.17% with a 3% coupon in 2037.

The electric system bonds are rated Aa2 by Moody’s and AA by S&P, the gas system bonds are rated Aa1 by Moody’s and AA-minus by S&P and the water system bonds are rated Aa1 by Moody’s and AAA by S&P.

Citi priced Arlington, Texas’ $110.895 million of senior lien special tax revenue refunding bonds.

The deal was priced to yield from 1.10% with a 3% coupon in 2020 to 2.73% with a 5% coupon in 2034.

The 2020 through 2024 maturities are uninsured and carry ratings of A1 by Moody’s, A-plus by S&P and AA-plus by Fitch, while the 2025 through 2034 maturities totaling $92.21 million are insured by Assured Guaranty Municipal Corp., and rated AA by S&P.

In the competitive arena on Wednesday, the Maryland Department of Transportation sold $425 million of Series 2017 second issue consolidated transportation bonds.

Citigroup won the bonds with a true interest cost of 2.28%. The issue was priced to yield from 0.96% with a 5% coupon in 2020 to 2.97% with a 3% coupon in 2032.

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

Since 2007, Maryland DOT has sold about $4.46 billion of securities, with the most issuance occurring in 2015 when it sold $961 million. It saw the lowest year of issuance in 2014 when it sold $100 million. With Wednesday’s sale, it has now issued more bonds this year than it did in 2016.

Seattle, Wash., competitively sold $385.37 million of Series 2017C municipal light and power improvement and refunding revenue bonds.

Morgan Stanley won the bonds with a true interest cost of 3.17%. The issue was priced to yield from 0.85% with a 5% coupon in 2018 to 3.23% with a 4% coupon in 2043; a 2047 maturity was priced as 4s to yield 3.28%

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

Muni CUSIP requests rose 38% in August
Total demand for new municipal CUSIP identifiers rose 38% in August, CUSIP Global Services said on Thursday, after falling 36% in July.

The report tracks requests by issuers for muni identifiers as an early indicator of new volume.

A total of 1,404 municipal identifier requests were made last month, compared to 1,092 in July. Total requests include bonds, long- and short-term notes and other municipal securities.

On a year-over-year basis, however, muni request volume was down 20.2% through the end of August, reflecting ongoing volatility in municipal issuance.

“CUSIP request volume for the month of August has stayed true to form with what we’ve seen over the course of this year as issuers of new securities ratchet-up their volume one month, slow-down a bit the next month, and repeat ,” Gerard Faulkner, director of operations for CUSIP Global Services. “As a whole, volumes are strong this year, but the path we’ve taken to get here has been volatile.”

Municipal bond requests also rose in August. A total of 1,141 muni identifier requests were made during the month, up from July’s 826.

Long-term muni note CUSIP requests dropped to 57 last month compared to 81 in July while short-term muni note CUSIP demand rose to 138 `in August from 123 in July.

On a state-by-state basis, CUSIPs for public finance offerings from Texas issuers led the way in August with 172 orders. New York came in second with 156 followed by California issuers with 86 CUSIP requests.

“Market participants are clearly watching interest rates and the broader geopolitical situation to choose their spots to issue new securities optimally,” said Richard Peterson, senior director at S&P Global Market Intelligence. “Though the vast majority of asset classes are showing growth in new request volume versus last year, we’re not seeing the same unbridled enthusiasm that was a hallmark of new issuance volume in 2016.”

Secondary market
The yield on the 10-year benchmark muni general obligation rose one basis point to 1.87% from 1.86% on Tuesday, while the 30-year GO yield gained two basis points to 2.75% from 2.73%, according to the final read of Municipal Market Data's triple-A scale.

U.S. Treasuries were weaker on Wednesday. The yield on the two-year Treasury rose to 1.35% from 1.33% on Tuesday, the 10-year Treasury yield gained to 2.19% from 2.17% and the yield on the 30-year Treasury bond increased to 2.79% from 2.78%.

On Wednesday, the 10-year muni-to-Treasury ratio was calculated at 85.3%, compared with 85.8% on Tuesday, while the 30-year muni-to-Treasury ratio stood at 98.5% versus 98.4%, according to MMD.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 35,369 trades on Tuesday on volume of $8.62 billion.

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Chip Barnett

Chip Barnett

Chip Barnett is a journalist with more than 40 years of experience. Barnett is currently Senior Market Reporter for The Bond Buyer.
Aaron Weitzman

Aaron Weitzman

Aaron Weitzman is a markets reporter for The Bond Buyer, focusing on the sell side of the municipal bond market.