Municipal bonds finished mixed on Wednesday as the state of California competitively sold about $604 million of general obligation bonds.
Primary market
Wells Fargo Securities won California’s $603.89 million of various purpose GO refunding bonds with a true interest cost of 2.81%.
The issue was priced to yield from 0.81% with a 5% coupon in 2017 to 2.66% with a 5% coupon in 2030.
The deal is rated Aa3 by Moody’s Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings.
Since 2013, the Golden state has issued over $33 billion of bonds. In the past five years the state sold the most debt in 2016 when it issued $8.9 billion of securities; it sold the least amount of bonds in 2014 when it offered $6.4 billion of securities.
The Arcadia Unified School District, Calif., competitively sold $188.9 million of Series 2017 GO refunding bonds.
Bank of America Merrill Lynch won the bonds with a TIC of 3.68%. The issue was priced to yield from 0.85% with a 2% coupon in 2017 to 3.58% with a 4% coupon in 2046.
The deal is rated Aa1 by Moody’s and AA by S&P.
RBC Capital Markets received the official award on the New York City Transitional finance Authority’s $839.04 million of tax-exempt future tax secured subordinate bonds.
The $800 million of Fiscal 2017 Series E Subseries E-1 tax-exempts were priced to yield from 0.95% with a 3% coupon in 2019 to 3.20% with a 5% coupon in 2040, and to yield from 3.22% with a 5% coupon in 2043 to 3.712% with a 3.625% coupon in 2045.
The $39.04 million of Fiscal 1999 Series A Subseries A-2 tax-exempts were priced as a remarketing to yield 1.15% with 3%, 4% and 5% coupons in a triple-split 2019 maturity.
The deal is rated Aa1 by Moody’s and AAA by S&P and Fitch.
“During the [two-day] retail order period for the tax-exempt bonds, TFA received $273 million of retail orders, of which approximately $237 million was usable,” the New York City Comptroller’s office said in a statement after the sale. “During the institutional order period, TFA received $2.6 billion of priority orders, representing over 4.4 times the bonds offered for sale to institutional investors. Given the strong demand, TFA reduced yields by one to seven basis points for 21 different maturities, out of a total of 28 maturities offered to investors.”
JPMorgan Securities received the written award on Energy Northwest’s $587.79 million of electric revenue refunding tax-exempt and taxable bonds.
The $238.07 million of Series 2017A Project 1 electric revenue refunding bonds were priced as 5s to yield 2.28% and 1.81% in a split 2026 maturity, 2.49% in 2027 and 2.49% and 1.89% in a split 2028 maturity.
The $188.13 million of Series 2017A Columbia Generating Station electric revenue refunding bonds were priced to yield 0.90% with a 5% coupon in 2018 and to yield from 1.43% with a 4% coupon in 2021 to 1.98% with a 5% coupon in 2024, and to yield 2.58% with a 5% coupon in 2029 and to yield from 2.95% with a 5% coupon in 2033 to 3.00% with a 5% coupon in 2035.
The $154.44 million of Series 2017A Project 3 electric revenue refunding bonds were priced as 5s to yield 0.90% in 2018, 2.16% in 2025 and 2.49% in 2028.
The $1.730 million of Series 2017B Project 1 taxable electric revenue refunding bonds were priced at par to yield 2.895% in 2020 and 2.943% in 2025.
The $3.8 million of Series 2017B Columbia Generating Station taxable electric revenue refunding bonds at par to yield 1.895% in 2020 and 3.389% in 2029.
The $1.660 million of Series 2017B Project 3 taxable electric revenue refunding bonds were priced at par to yield 1.895% in 2020 and 2.943% in 2025.
The deal is rated Aa1 by Moody’s, AA-minus by S&P and AA by Fitch.
There are only a handful of competitive sales and no big negotiated deals slated for Thursday ahead of , when the market is closed for the Good Friday holiday.
Secondary market
On Wednesday, the yield on the 10-year benchmark muni general obligation fell one basis point to 2.12% from 2.13% on Tuesday, while the 30-year GO yield was unchanged from 2.94%, according to the final read of Municipal Market Data's triple-A scale.
U.S. Treasuries were little changed on Wednesday. The yield on the two-year Treasury was unchanged from 1.23% on Tuesday, while the 10-year Treasury yield dropped to 2.29% from 2.30%, and the yield on the 30-year Treasury bond was flat from 2.93%.
The 10-year muni to Treasury ratio was calculated at 92.5% compared to 92.6% on Tuesday, while the 30-year muni to Treasury ratio stood at 100.4%, versus 100.3%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 40,037 trades on Tuesday on volume of $10.03 billion.
