The municipal bond primary stole the spotlight again on Wednesday as the Port Authority of New York & New Jersey offering was priced for institutions and the New York City Transitional Finance Authority held a second day of retail orders on its bond deal.
Secondary Market
Prices of top-rated munis finished mixed in secondary trading, according to bond traders.
The yield on the 10-year benchmark muni general obligation fell one basis point to 1.94% from 1.95% on Tuesday, while the yield on the 30-year GO was unchanged at 2.82%, 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 dropping to 0.50% from 0.51% on Tuesday as the 10-year yield rose to 1.90% from 1.89% and the 30-year yield increased to 2.55% from 2.54%.
The 10-year muni to Treasury ratio was calculated on Wednesday at 102.2% versus 102.5% on Tuesday, while the 30-year muni to Treasury ratio stood at 110.3% compared to 110.8%.
Primary Market
In the negotiated sector, Bank of America Merrill Lynch priced the Port Authority of New York & New Jersey’s $775 million of consolidated bonds for institutional investors after a one-day retail order period.
The $125 million PANY/NJ’s 188th Series alternative minimum tax consolidated bonds were priced to yield from 0.66% with a 5% coupon in 2017 to 3.35% with a 5% coupon in 2035. The 2015 and 2016 maturities were offered as sealed bids.
The PANY/NJ’s $490 million of 189th Series tax-exempt consolidated bonds were priced to yield from 0.51% with a 4% coupon in 2017 to 3.05% with a 5% coupon in 2035. A term bond in 2040 was priced as 5s to yield 3.15% and a 2045 term was priced as 5s to yield 3.19%. The 2016 maturity was offered as a sealed bid.
The PANY/NJ’s $160 million of 190th Series tax-exempt consolidated bonds were priced as 5s to yield from 1.69% in 2026 to 2.36% in 2038.
On Tuesday, BAML priced the $125 million 188th Series bonds for retail to yield from 0.56% with a 5% coupon in 2017 to 2.62% with a 5% coupon in 2025; a 2035 maturity was priced as 5s to yield 3.37%. No retail orders were taken in the 2026-2034 maturities; the 2015 and 2016 maturities were offered as sealed bids.
The $550 million 189th Series bonds were priced for retail to yield from 0.51% with a 4% coupon in 2017 to 2.47% with a 5% coupon in 2026; and as 3s to yield 3.10% in 2029, as 3 1/4s to yield 3.42% in 2033 and as 5s to yield 3.22% in a 2045 term. No retail orders were taken for the 2027-2028, 2030-2032, 2034-2035 and 2040 maturities. The 2016 maturity was offered as a sealed bid.
The $100 million 190th Series bonds were priced for retail as 5s to yield 1.79% in 2026 and 1.90% in 2027. No retail orders were taken in the 2028 through 2035 maturities.
The issue was rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings.
Loop Capital Markets on Wednesday held the second of a two days of retail orders on the NYC TFA’s $650 million of Fiscal 2015 Subseries E-1 future tax secured subordinate bonds. The institutional pricing is slated for Thursday.
On day two of the retail pricing, the bonds were priced to yield 0.87% with 1%, 3% and 5% coupons in a 2018 triple split maturity to 3.00% with a 5% coupon in 2033. A 2042 split maturity was priced as 3 5/8s to yield 3.70% and as 5s to yield 3.19%. No retail orders were taken in 2031, 2034, 2035 and 2041. A 2017 maturity was offered as a sealed bid.
On day one, the bonds were priced for retail to yield 0.87% with 1%, 3% and 5% coupons in a 2018 triple split maturity to 3.02% with a 5% coupon in 2033. A 2042 split maturity was priced as 3 5/8s to yield 3.70% and as 5s to yield 3.21%. No retail orders were taken in 2030, 2031, 2034, 2035 and 2041. A 2017 maturity was offered as a sealed bid.
The bonds were rated Aa1 by Moody's and triple-A by S&P and Fitch.
Additionally, the TFA will competitively sell $200 million of Fiscal 2015 Series E Subseries E-2 future tax secured taxable subordinate bonds on Thursday. The deal may be structured as serials ranging from 2020 to 2029. The taxables were rated Aa1 by Moody’s and triple-A by S&P and Fitch.
Morgan Stanley priced the New Jersey Educational Facilities Authority’s $157.94 million of 2015 Series A revenue refunding bonds for Princeton University. The bonds were priced to yield from 0.25% with a 3% coupon in 2016 to 3.01% with a 4% coupon in 2035.
Proceeds of the sale will be used to finance the current refunding of the University’s 2005 Series B revenue bonds. The issue is rated triple-A by Moody’s and S&P.
Since 1995, the New Jersey Educational Facilities Authority has sold over $2.77 billion of debt with Princeton University as the beneficiary. The NJEFA saw high years of issuance in 2007 and 2008 when it sold $393 million and $459 million, respectively. The Authority did not issue any debt for Princeton in 2000, 2009, 2012 or 2013.
In the competitive arena on Wednesday, the state of Virginia sold $214.88 million of Series 2015B general obligation refunding bonds. Citi won the deal with a true interest cost of 2.2654%. The issue was priced to yield from 0.80% with a 4% coupon in 2018 to 3.22% with a 3% coupon in 2037. The deal is rated triple-A by Moody’s, S&P and Fitch.
Virginia last sold bonds competitively on March 27, 2014, when JPMorgan won $133.81 million of Series 2014A GOs with a true interest cost of 3.0823%.
RBC Capital Markets priced the Michigan Finance Authority’s $181.21 million of hospital revenue and refunding bonds for the Sparrow Obligated Group. The bonds were priced to yield from 0.30% with a 3% coupon in 2015 to 4.04% with a 4% coupon in 2036; a 2040 term was priced as 4s to yield 4.08% and a 2045 term was priced as 5s to yield 3.72%. The issue is rated A1 by Moody’s and A-plus by S&P.
Morgan Stanley priced the Texas Public Finance Authority’s $135.11 million deal consisting of the state of Texas’ $129.85 million Series 2015A GO refunding bonds and $5.26 million Series 2015B GO park development refunding bonds. The Series 2015A bonds were priced to yield from 0.77% with 4% and 5% coupons in a 2017 split maturity to 2.51% with a 5% coupon in 2028. The Series 2015B bonds were priced to yield 0.13% with a 2% coupon in 2015 to 1.24% with a 5% coupon in 2019. The issue is rated triple-A by Moody’s, S&P and Fitch.
JPMorgan priced $115.47 million Halifax Hospital Medical Center in Daytona Beach, Fla.’s Series 2015 hospital revenue refunding bonds. The issue was priced to yield from 1.02% with a 3% coupon in 2017 to 3.62% with a 5% coupon in 2030; a 2035 term was prices as 5s to yield 3.82%, a 2038 term was priced as 4s to yield 4.14%, a 2041 term was priced as 4s to yield 4.18% and a 2046 term was priced as 5s to yield 4.01%. The bonds are rated A-minus by S&P and BBB-plus by Fitch.
