Municipal bond traders saw the first of the week's new issue supply hit the market, led off by retail pricings of issuers from New York and Oregon, as well as institutional pricings from issuers in Florida, Nevada, Massachusetts, Maryland and Texas.
Munis were weaker still at midday Wednesday, as yields on some maturities were up to six basis points higher, according to traders.
Primary Market
Ramirez & Co. priced the New York Metropolitan Transportation Authority's $722.88 million of revenue green bonds for retail investors. The $437.30 million series 2016A-1 was priced to yield from 0.58% with a 4% coupon in 2017 to 2.85% with a 5% coupon in 2036. A split term bond in 2041 was priced to yield 3.62% and 3.12%, with 3.5% and 5% coupons, respectively. A 2046 term bond was priced to yield 3.17% with a 5% coupon. The 2016 maturity was offered as a sealed bid.
The $285.58 million series 2016A-2 was priced to yield from 0.83% with a 5% coupon in 2019 to 2.50% at par and 2.32% with a 5% coupon in a split 2028 maturity.
The deal, which will be priced for institutions on Thursday, is rated A1 by Moody's Investors Service, AA-minus by Standard and Poor's, A by Fitch Ratings and AA-plus by Kroll Bond Rating Agency.
Bank of America Merrill Lynch priced the Florida Municipal Power Agency's $421.99 million of All-Requirements Power Supply projects refunding revenue bonds. The bonds are priced to yield from 1.15% with a 5% coupon in 2020 to 2.03% with a 5% coupon in 2024. The bonds were also priced to yield from 2.30% with a 5% coupon and a 4% coupon in a split 2026 maturity to 2.78% with a 5% coupon and 3.16% with a 3% coupon in a split 2031 maturity. The deal is rated A2 by Moody's and A-plus by Fitch.
JPMorgan Securities priced the Oregon Health & Science University's $196.23 million of Series 2016B revenue bonds for retail investors. The bonds were priced to yield 2.73% with a 2.5% coupon and 2.53% with a 4% coupon in a triple-split maturity in 2028, with the third split not available for retail. The bonds are also priced to yield from 3.25% with a 3.125% coupon in 2033 to 3.63% with a 3.5% coupon in a split 2039 maturity, with the second split not available for retail. The bonds were also priced to yield 3.67% with a 4% coupon in half of a split 2046 maturity, with the second split not available for retail. No retail orders were available for the 2034-2037 and 2044 maturities. The deal is rated Aa3 by Moody's and AA-minus by S&P and Fitch.
Jefferies priced and then re-priced the Maryland Health & Higher Educational Facilities Authority's $136.31 million of Series 2016A revenue bonds for the Mercy Medical Center. The bonds were repriced to yield 3.50% at par and 3.15% with a 5% coupon in a split 2032 maturity. The bonds were also priced to yield from 3.20% with a 5% coupon in 2033 to 3.31% with a 5% coupon in 2036. Term bonds in 2038 and 2042 were priced to yield 3.42% and 4.05%, as 5s and as 4s, respectively. The deal is rated Baa2 by Moody's and BBB by S&P.
Piper Jaffray priced the Alvin Independent School District, Texas' $129.545 million of 2016 unlimited tax schoolhouse and refunding GOs. The bonds are priced to yield from 0.48% with a 3% coupon in 2017 to 2.73% with a 5% coupon in 2037. A 2042 term bond was priced to yield 3.33% with a 4% coupon. The deal is rated triple-A by Moody's and Fitch and is backed by the Permanent School Fund Guarantee Program.
The largest competitive sale of the week came from the Silver State, as Nevada sold $290.79 million of Series 2016 highway revenue motor vehicle fuel tax improvement and refunding bonds, with Wells Fargo winning the bid with a true interest cost of 2.19%. The bonds were priced to yield from 0.55% with a 5% coupon in 2017 to 2.67% with a 3% coupon in 2029.
The deal is rated Aa2 by Moody's, AAA by S&P and AA-plus by Fitch.
Since 2006, Nevada has issued bonds an average of 5.5 times a year, selling about $4 billion in total, with the largest issuances seen in 2013 and 2015 when it offered $1 billion and $632 million, respectively, and the lows in 2009 and 2011, when it issued $131 million and $149 million, respectively.
The Massachusetts State College Building Authority sold $178.29 million of Series 2016A refunding revenue bonds, as Bank of America Merrill Lynch won the bid with a TIC of 3.18%. The bonds were priced to yield from 0.75% with a 4% coupon in 2019 to 2.72% with a 5% coupon in 2038. Term bonds in 2041 and 2040 were priced as 5s to yield 2.87% and 2.97%, respectively. The deal is rated Aa2 by Moody's and AA by S&P.
York County, S.C., sold $108.97 million of general obligation bonds of 2016, as Citi won with a TIC of 2.22%. The bonds were priced to yield from 0.50% with a 5% coupon in 2017 to 2.91% with a 3.25% coupon in 2031.The deal is rated Aa1 by Moody's and AA-plus by S&P.
Secondary Market
Top-rated municipal bonds continued to weaken on Wednesday. The yield on the 10-year benchmark muni general obligation was from two to four basis points higher from 1.62% on Tuesday, while the 30-year muni yield was from four to six basis points higher from 2.72%, according to a midday read of Municipal Market Data's triple-A scale.
Treasuries were weaker at midday Wednesday. The yield on the two-year Treasury rose to 0.75% from 0.72% on Tuesday, while the 10-year Treasury yield jumped to 1.83% from 1.78% and the 30-year Treasury bond yield increased to 2.71% from 2.65%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 91.2% compared to 91.7% on Friday, while the 30-year muni to Treasury ratio stood at 103.0% versus 103.0%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 34,002 trades on Tuesday on volume of $6.449 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $900.7 million to $8.83 billion on Wednesday. The total is comprised of $3.27 billion of competitive sales and $5.56 billion of negotiated deals.
