Prices of top-quality municipal bonds ended unchanged on Tuesday, traders said, as some of the week's chunky new issue supply began to hit the market.
The yield on the 10-year benchmark muni general obligation closed steady at 2.33% from Monday, while the yield on the 30-year GO was flat at 3.31%, according to the final read of Municipal Market Data's triple-A scale.
Treasury prices were stronger on Tuesday, with the yield on the two-year Treasury note dropping to 0.64% from 0.67% on Monday, while the 10-year yield declined to 2.40% from 2.43% and the 30-year yield decreased to 3.19% from 3.21%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 95.6% versus 96.2% on Monday, while the 30-year muni to Treasury ratio stood at 102.9% compared to 103.3%, according to MMD.
Primary Market
In the negotiated sector on Tuesday, JPMorgan priced the California State University Trustees' $1.04 billion of revenue bonds for retail investors ahead of the institutional pricing on Wednesday.
The Series 2015A tax-exempts were priced for retail to yield from 0.74% with 2% and 5% coupons in a split 2017 maturity to 3.38% with a 5% coupon in 2035; and part of a 2043 split term bond was priced as 4s to yield 4.04%.The 2015 and 2016 maturities were offered as sealed bids. No retail orders were taken in the 2028-2029, 2031-2034, 2036-2038, 2043 or 2047 maturities.
The bonds are rated Aa2 by Moody's Investors Service and AA-minus by Standard & Poor's.
Since 1996, the Trustees of the California State University have issued roughly $6.75 billion of debt. The years that saw the most issuance were in 2005 and 2014, when the University issued $1.34 billion and $748 million of debt, respectively. The University did not come to market at all in 1997, 2001 or 2006.
Also on Tuesday, Goldman, Sachs priced San Antonio, Texas' $321.2 million of New Series 2015 electric and gas systems revenue refunding bonds.
The bonds were priced to yield from 0.86% with a 5% coupon in 2018 to 3.20% with a 5% coupon in 2032. The bonds were rated Aa1 by Moody's, AA by S&P, and AA-plus by Fitch Ratings.
Citi priced the Arizona School Facilities Board's $258.65 million of refunding certificates of participation.
The COPs were priced as 2s to yield 0.09% in 2015 and as 5s to yield 1.40% in 2019 to 2.01% in 2021. The COPs were also priced at par to yield 2.35% in 2022 and as 5s to yield 2.53% in 2023. The deal was rated triple-A by both Moody's and S&P.
Raymond James priced the Comal Independent School District, Texas' $138.48 million of Series 2015 A&B unlimited tax school building bonds.
The Series A bonds were priced to yield from 0.30% with a 2% coupon in 2016 to 1.46% with a 5% coupon in 2020. The Series B bonds were priced to yield from 0.35% with a 2% coupon in 2016 to 3.98% with a 4% coupon in 2040. The issue is backed by the Permanent School Fund guarantee and is rated triple-A by Moody's and Fitch.
In the competitive arena on Tuesday, Virginia Pubic School Authority sold $98.02 million of Series 2015 special obligation school financing bonds for Prince William County. Morgan Stanley won the bonds with a true interest cost of 2.89%.
The bonds were priced to yield from 0.38% with a 5% coupon in 2016 to 3.52% with a 3.75% coupon in 2035. The deal was rated triple-A by Moody's, S&P and Fitch.
The PSA last sold comparable bonds competitively for Prince William County on Sept. 23, 2014 when Citigroup won $82.55 million of Series 2014 special obligation school financing bonds with a TIC of 2.62%.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 35,869 trades on Monday on volume of $4.545 billion.
The most active bond, based on the number of trades, was the FSU Financial Assistance Inc., Fla.'s Series 2015A educational and athletic facilities improvement revenue 4 1/4s of 2045, which traded an 94 times at an average price of 99.533 and an average yield of 4.274%. The bonds were initially priced at 97.501 to yield 4.40%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.342 billion to $14.102 billion on Tuesday. The total is comprised of $3.01 billion competitive sales and $11.09 billion of negotiated deals.
