Top-rated municipal bonds ended weaker on Tuesday, according to traders, as the first of this week’s new deals hit the screens.

Primary market
Siebert Cisneros Shank & Co. priced New York City’s $855.56 million of Fiscal 2018 Series B and Series 1 general obligation bonds on the first of a two-day retail order period before the institutional pricing on Thursday.

The $550 million of the B-1 bonds were priced for retail to yield from 0.90% with a 3% in 2019 to 1.02% with a 4% coupon in 2020 and from 3.05% with a 3% coupon in 2034 to 2.98% with a 4% coupon in 2036. The bonds were also priced to yield 3.15% with a 4% coupon in 2040 and 3.32% with a 3.25% coupon in 2042. No retail orders were being taken in the 2030 through 2033, 2037 through 2039 or 2041 maturities.

The $305.56 million of Series 1 bonds were priced for retail to yield from 1.01% with a 2% coupon in 2020 to 2.57% 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.

"The AA GO rating reflects our view of New York City's strong economy, with access to a broad and diverse metropolitan statistical area," S&P analyst Anne Cosgrove said on Monday.

Fitch cited the diversity of the city’s economy in its rating analysis.

“Fitch considers the city's unique economic profile, which centers on its identity as an international center for numerous industries and a major tourist destination, to be a credit strength,” Fitch said on Monday.

New York City has about $38 billion of GO debt outstanding as of June 30.

In the competitive arena on Tuesday, the state of Louisiana sold $300.09 million of Series 2017B general obligation bonds, which were won by Bank of America Merrill Lynch with a true interest cost of 2.95%.

The issue was priced to yield from 0.94% with a 5% coupon in 2018 to 3.34% with a 3.25% coupon in 2037.

The deal is rated Aa3 by Moody’s and AA-minus by S&P and Fitch.

Since 2008, the Bayou state has sold $9.76 billion of securities, with the most issuance occurring in 2012 when it sold $1.8 billion. The state saw the least amount of issuance in 2008 when it sold $200 million. With Tuesday’s sale, it will have issued more bonds this year than it did last year.

Prince George's County, Md., sold $104 million of Series 2017 certificates of participation for the Regional Medical Center.

Robert W. Baird won the bonds with a TIC of 3.21%. Pricing information was not available. The COPs are rated Aa1 by Moody’s and AA-plus by S&P.

And the state of Michigan competitively sold $119.58 million of GOs in two separate sales. Proceeds will primarily support water infrastructure, asset management plans, and water quality monitoring in communities across the state.

Goldman Sachs won the $79 million of Series 2017A tax-exempt GO environmental program and refunding bonds with a TIC of 1.70% while Fifth Third Securities won the $40.58 million of Series 2017B taxable GO environmental program bonds with a TIC of 2.11%.

The deals are rated Aa1 by Moody’s, AA-minus by S&P and AA by Fitch.

Michigan State Treasurer Nick Khouri said there buyers gave the offering a warm reception.

"The sale came with strong investor interest as 16 underwriters submitted competitive bids to purchase $79 million in tax-exempt bonds and 14 underwriters submitted competitive bids to purchase more than $40.5 million in federally taxable bonds," Khouri said in a press release.

"I am pleased with the results of this sale,” Khouri said. “The state of Michigan has worked hard to improve its finances and economy, demonstrating to the marketplace that our state is a sound investment. Today’s transaction provides resources to help better the quality of life of our residents.”

Back in the negotiated sector, Citigroup priced the state of Ohio’s $114.33 million of Series 2017A turnpike revenue refunding bonds.

The issue was priced to yield from 0.75% with a 3% coupon in 2018 to 1.80% with a 5% coupon in 2026. The bonds were priced to yield from 2.06% with a 5% coupon in 2028 to 2.35% with a 5% coupon in 2031.

The deal is rated Aa3 by Moody’s, AA-minus by S&P and AA by Fitch.

Morgan Stanley priced the West Valley-Mission Community College District, Calif.’s $100 million of Series 2017C election 0f 2012 general obligation bonds.

The issue was priced to yield from 0.72% with a 3% coupon in 2019 to 3.14$ with a 3% coupon in 2036.

The deal is rated triple-A by Moody’s and S&P.

On Wednesday, the Maryland Department of Transportation is competitively selling $425 million of Series 2017 second issue consolidated transportation bonds. The sale was originally anticipated to be $500 million.

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

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

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

Secondary market
Municipals turned weaker with Treasuries as equities continued to rise.

The yield on the 10-year benchmark muni general obligation rose three basis points to 1.86% from 1.83% on Monday, while the 30-year GO yield gained five basis points to 2.73% from 2.68%, according to the final read of Municipal Market Data's triple-A scale.

U.S. Treasuries were weaker on Tuesday. The yield on the two-year Treasury rose to 1.33% from 1.30% on Monday, the 10-year Treasury yield gained to 2.17% from 2.11% and the yield on the 30-year Treasury bond increased to 2.78% from 2.73%.

In late trade, the Dow Jones Industrial Average up 0.23%, the S&P 500 up 0.22% and the NASDAQ up 0.04%.

On Tuesday, the 10-year muni-to-Treasury ratio was calculated at 85.8%, compared with 86.0% on Monday, while the 30-year muni-to-Treasury ratio stood at 98.4% versus 97.7%, according to MMD.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 29,913 trades on Monday on volume of $6.25 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.