Municipal bonds were unchanged at mid-session, traders said, as they watched more new issues come to market, led by a sale from South Carolina's Clemson University.
Secondary Market
The yield on the 10-year benchmark muni general obligation was steady from 1.98% on Tuesday, while the 30-year yield was unchanged from 2.90%, according to a read of Municipal Market Data's triple-A scale.
Treasuries were lower, as the yield on the two-year Treasury rose to 0.95% from 0.94% on Tuesday while the 10-year Treasury yield was higher at 2.25% from 2.24% and the 30-year increased to 3.00% from 2.97%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 88.5% from 89.6% on Monday, while the 30-year muni to Treasury ratio stood at 97.5% compared to 98.3%, according to MMD.
Primary Market
In the competitive sector, Clemson University sold two separate competitive issues totaling $210.8 million. Both sales were rated Aa2 by Moody's Investors Service and AA by Fitch Ratings.
Citigroup won the $191 million of Series 2015B higher education revenue bonds with a true interest cost of 3.37%. The issue was priced to yield from 1.05% with a 5% coupon in 2019 to 3.40% with a 4% coupon in 2041; a 2046 maturity was priced as 4s to yield 3.48%.
Citi also won the $19.8 million of Series 2015B athletic facilities revenue bonds with a TIC of 3.33%. Pricing information was not immediately available. The sale's timing couldn't be more perfect as the Tigers football program is the only undefeated team in major college football and will compete in the national semi-final on Dec. 31.
Since 2005, Clemson University has issued about $483 million of debt. The most issuance took place in 2014, 2005, and 2012 when the university sold $50 million, $37 million and $33 million of bonds, respectively. The university did not come to the market from 2006 to 2011 or in 2013. A stranger to the muni bond market, the university located in South Carolina has averaged less than one deal per year.
Clemson last sold comparable bonds competitively on May 5, when Citi won $90.29 million of Series 2015 higher education revenue bonds with a TIC of 3.66% and Citi won $64.39 million of Series 2015 athletic facilities revenue bonds with a TIC of 3.73%.
In the negotiated sector on Wednesday, RBC Capital Markets is expected to price the Park Creek Metropolitan District, Colo.'s $252.71 million of Series 2015A senior limited property tax supported revenue refunding bonds. The issue is rated triple-B by Fitch.
RBC is also scheduled to price the Southern California Municipal Water District's $250 million of bonds.
RBC received the official award on the $333 million of Illinois State Toll Highway Authority's Series 2015A toll highway senior revenue refunding bonds. The deal was priced as 4s to yield 3.32% and as 5s to yield 3.03% in a split 2031 maturity and as 5s to yield 3.07% in 2032. The issue was rated Aa3 by Moody's and AA-minus by S&P and Fitch.
Wells Fargo is scheduled to price the Municipal Electric Authority of Georgia's $200 million of general revenue bonds in three series consisting of power revenue bonds, Project One subordinated bonds, and general resolution projects subordinated bonds. The senior bonds are rated A1 by Moody's and A-plus by S&P and Fitch, while the subordinates are rated A2 by Moody's, A by S&P and A-plus by Fitch.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 38,151 trades on Tuesday on volume of $8.995 million.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $2.747 billion to $6.91 billion on Wednesday. The total is comprised of $1.15 billion competitive sales and $5.76 billion of negotiated deals.
