Top-rated municipal bonds ended steady to stronger on Thursday, traders said, as the last of this week's big sales came to market, led by deals from issuers in New York and California.
Ramirez & Co. priced the Port Authority of New York and New Jersey's $512.62 million of 195th and 196th series of consolidated bonds.
The $312.62 million of the 195th Series was priced to yield from 0.52% with a 2% coupon in 2016 to 2.10% with a 5% and 2% at par in a split 2026 maturity; a 2035 maturity was priced as 5s to yield 2.70% and a 2036 maturity was priced as 5s to yield 2.76%.
The $200 million of the 196th Series was priced at par to yield from 2.125% in 2027 to 2.625% in 2034.
The deal, which is subject to the alternative minimum tax, is rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings.
Since 2006, Port Authority has issued $23.2 billion of debt, with over $2 billion of bonds sold in 2007, 2010, 2012, 2014 and 2015. The smallest issuance year was 2008, when the authority sold $1.6 billion.
Bank of America Merrill Lynch priced the West Virginia Hospital Finance Authority's $264.93 million of Series 2016A revenue refunding bonds for the West Virginia United Health System Obligated Group.
The bonds were priced to yield from 0.69% with a 2% coupon in 2017 to 3.22% with a 3% coupon in 2036. A term bond in 2039 was priced to yield approximately 3.408% with a 3.25% coupon and another term bond in 2041 was priced to yield 3.30% with a 4% coupon. The deal is rated A2 by Moody's and A by S&P.
Siebert Brandford Shank priced the Los Angeles Department of Water and Power's $275 million of Series 2016A power system revenue bonds.
The issue was priced to yield from 0.64% with 4% and 5% coupons in a split 2018 maturity to 2.12% with a 5% coupon in 2031; as 5s to yield 2.25% in 2033; as 5s to yield from 2.36% in 2035 to 2.49% in 2038; a 2040 maturity was priced as 5s to yield 2.52% and a 2046 maturity was priced as 5s to yield 2.61%.
The deal is rated Aa2 by Moody's, AA-minus by S&P and Fitch.
In the competitive arena, Milwaukee sold $293.77 million of notes and bonds in three separate sales.
Bank of America Merrill Lynch won the won the $176.24 million deal with a true interest cost of 2.06%. The deal consists of $133.51 million of Series 2016N2 general obligation promissory notes and $42.73 million of Series 2016B3 GO corporate purpose bonds.
The Series 2016N2 notes were priced to yield from 0.57% with a 2% coupon in 2017 to 1.86% with a 4% coupon in 2026. The Series 2016B3 bonds were priced to yield from 2.25% with a 2% coupon in 2027 to 3.05% with a 3% coupon in 2033.
FTN Financial won the $27.53 million of Series 2016T4 taxable GO corporate purpose bonds with a TIC of 2.32%. Pricing information was not available.
Both deals are rated Aa3 by Moody's and AA by S&P and Fitch.
Milwaukee also sold $90 million of Series 2016R1 revenue anticipation notes. Morgan Stanley won the notes with a bid of 1.50% and premium of $512,100, an effective rate of 0.521490%.
The RANs are rated MIG1 by Moody's, SP1-plus by S&P and F1-plus by Fitch.
Since 2006, the city has sold about $4.6 billion of bonds and notes, with the most issuance occurring in 2010 when it sold $604.3 million and the least issuance in 2007 when it sold $303.8 million.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $2.07 billion to $11.23 billion on Thursday. The total is comprised of $5.72 billion of competitive sales and $5.51 billion of negotiated deals.
Secondary Market
The yield on the 10-year benchmark muni general obligation was unchanged from 1.58% on Wednesday, while the 30-year muni yield fell two basis points to 2.51% from 2.53%, according to the final read of Municipal Market Data's triple-A scale.
U.S. Treasuries were stronger on Thursday. The yield on the two-year Treasury dropped to 0.72% from 0.75% on Wednesday, while the 10-year Treasury yield declined to 1.75% from 1.79% and the yield on the 30-year Treasury bond decreased to 2.61% from 2.66%.
The 10-year muni to Treasury ratio was calculated at 90.6% on Thursday compared with 88.6% on Wednesday, while the 30-year muni to Treasury ratio stood at 96.4% versus 95.7%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 40,439 trades on Wednesday on volume of $12.27 billion.
Tax-Exempt Money Market Funds See Outflows
Tax-exempt money market funds experienced outflows of $1.71 billion, bringing total net assets to $216.04 billion in the week ended May 2, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $3.85 billion to $217.75 billion in the previous week.
The average, seven-day simple yield for the 296 weekly reporting tax-exempt funds rose to 0.06% from 0.05% in the previous week.
The total net assets of the 892 weekly reporting taxable money funds increased $6.88 billion to $2.483 trillion in the week ended May 3, after an inflow of $18.87 billion to $2.476 trillion the week before.
The average, seven-day simple yield for the taxable money funds was unchanged from 0.10% in the prior week.
Overall, the combined total net assets of the 1,188 weekly reporting money funds increased $5.17 billion to $2.699 trillion in the period ended April 26, which followed an inflow of $15.02 billion to $2.694 trillion.
