Prices of top-quality municipal bonds finished unchanged on Wednesday, traders said, as Stifel priced the city of Los Angeles' $1.4 billion of tax and revenue anticipation notes while Bank of America Merrill Lynch priced the state of Massachusetts' $955 million of general obligation bonds for institutions.
Primary Market
Stifel priced Los Angeles' $1.39 billion of Series 2015 TRANs as 2s to yield 0.315%. The TRANS, dated as of delivery, are due June 30, 2016.
"The deal went well," a person familiar with the transaction said. "It got a lot of interest."
The notes were rated MIG1 by Moody's Investors Service and SP1-plus by Standard & Poor's. JP Morgan and Ramirez were co-managers on the deal with Omnicap Group serving as the financial advisor.
Proceeds of the sale will be used to smooth cash flow and make pension payments before July 15, generating about $36.4 million in savings from a pre-payment discount.
Since 1996, Los Angles has sold about $15 billion of TRANs with the most issuance occurring in 2013 and 2014 when it sold $1.3 billion and $1.4 billion, respectively. The smallest issuance took place in 1998 and 1999 when the city sold $248 million and $191 million, respectively.
Bank of America Merrill Lynch priced for institutions the state of Massachusetts' $954.46 million of GO consolidated loan of 2015, Series C refunding bonds and Series 2015A bonds. The deal had a retail order period on Tuesday.
The $704.46 million of Series 2015A GO refunding bonds were priced as 3s to yield 2.07% in 2022 and as 5s to yield 2.22% in 2023. The bonds were also priced to yield from 2.55% with a 5% coupon in 2025 to 3.84% with a 4% coupon and 3.41% with a 5% coupon in a split 2037 maturity. The 2016 and 2017 maturities were offered as sealed bids.
The $250 million of Series C Consolidated Loan of 2015 GOs were priced as 5s to yield 1.05% in 2018 to 2.07% in 2022, 2.43% in 2024, 3.15% in 2031, 3.20% in 2032 and 3.51% in 2040. A split 2045 term bond was priced at par to yield 4.00% and as 5s to yield 3.58%.
The deal is rated Aa1 by Moody's and AA-plus by both S&P and Fitch Ratings.
Siebert Brandford Shank priced for institutions Miami-Dade County, Fla.'s $206.08 million of Series 2015A public facilities revenue and refunding bonds for the Jackson Health System. The issue had a retail order period on Monday.
The bonds were priced to yield from 1.06% with 4% and 5% coupons in a split 2017 maturity to 3.90% with a 5% in 2036. A 2016 maturity was offered as a sealed bid. The issue was rated Aa2 by Moody's, A-plus by S&P and AA-minus by Fitch.
Secondary Market
The yield on the 10-year benchmark muni general obligation closed unchanged from 2.32% on Tuesday, while the yield on the 30-year GO was flat at 3.30%, according to the final read of Municipal Market Data's triple-A scale.
Treasury prices were mixed on Wednesday with the yield on the two-year Treasury note rising to 0.68% from 0.67% on Tuesday, while the 10-year yield fell to 2.37% from 2.39% and the 30-year yield decreased to 3.15% from 3.20%.
The 10-year muni to Treasury ratio was calculated on Wednesday at 101.1% versus 96.4% on Tuesday, while the 30-year muni to Treasury ratio stood at 104.2% compared to 103.2%, according to MMD.
Puerto Rico Trades
Trading on news from Puerto Rico was active over the past two days.
Puerto Rico's legislature passed a bill to immunize the Government Development Bank's leaders against lawsuits. Separately, GDB's chairman of the board, David Chafey, said he would resign next week for "personal reasons." The Puerto Rico Electrical Power Authority replaced its executive director, general counsel, chief financial officer, generation director and customer service director.
The Puerto Rico House of Representatives passed a balanced budget. And the government is now considering a bill that would allow postponement of monthly set-asides for long-term general obligation debt payments.
The news sent prices of Puerto Rico general obligation bonds down in trading on Wednesday. The Puerto Rico commonwealth Series A of 2014 GOs traded at 79 when a customer sold $2 million of the paper, according to the Municipal Securities Rulemaking Board's EMMA website.
On Tuesday, the GOs traded between 80.75 and 79.125 on volume of $26.98 million. The two biggest sell trades on Tuesday were for $5 million each, when customers sold the GOs for 79.50 and 79.125. The three biggest buy trades on Tuesday were for $2 million apiece when customers bought the GOs for 80.50, 80.50 and 79.375, according to EMMA.
Some other notable Puerto Rico trades on Wednesday, according to Markit, included the GDB 5s of 2023, which traded in the amount of $4.03 million at 43.00 to yield 18.73%; the commonwealth 5 1/2s of 2019, which traded in the amount of $5 million at 75.00 to yield 13.84; the Public Buildings Authority 5 1/4s of 2042 which traded in the amount of $5 million at 60.81 to yield 9.21%; and the Sales Tax Financing Corp.'s 0s of 2056, which traded in the amount of $2.5 million at 5.25% to yield 7.30%.
