Top shelf municipal bonds finished steady on Wednesday, according to traders, as big deals from Alaska, New Jersey, Texas and Ohio came to market.
In the competitive arena, the New Jersey Educational Facilities Authority sold two issues totaling $217.22 million for Princeton University.
Goldman Sachs won the $117.22 million of Series 2016B revenue refunding bonds with a true interest cost of 1.77%. The issue was priced as 5s to yield from 0.51% in 2017 to 2.01% in 2027. Citigroup won the $100 million of Series 2016A revenue bonds with a TIC of 2.53%. The bonds were priced to yield 0.60% with a 5% coupon in 2018 and to yield from 0.91% with a 5% coupon in 2020 to 2.71% with a 4% coupon in 2035. Both sales are rated triple-A by Moody's Investors Service and Standard & Poor's.
Alaska competitively sold $134.79 million of Series 2016A general obligation bonds in its first GO deal since Moody's cut the state's rating one notch two weeks ago.
Bank of America Merrill Lynch won the deal with a TIC of 3.02%. The bonds were priced to yield from 0.39% with a 5% coupon in 2016 to 2.86% with a 5% coupon in 2035. The deal is rated Aa1 by Moody's, AA-plus by S&P and triple-A by Fitch Ratings.
Since 2006, Alaska has issued bonds an average of 2.3 times a year, selling about $1.8 billion, with the largest issuances in 2006 and 2010 when it offered $413 million and $371 million, respectively. The lows came in 2007 and 2008, when the 49th state of the U.S. did not issue any bonds.
In the negotiated sector, Ramirez & Co. priced the Ohio Water Development Authority's $167.94 million of Fresh Water Series 2016A water development revenue bonds on Wednesday.
The bonds were priced as 5s to yield from 2.25% and 2.28% in a split 2028 maturity to 3.03% with a 4% coupon in 2036. The deal is rated triple-A by Moody's and S&P.
Citi priced the Dallas Independent School District, Texas' $266.45 million of Series 2016B multi-modal unlimited tax school building bonds in six series.
The $29.55 million of Series 2016B-1 bonds were priced as 3s to yield 0.67% in 2036; they have a 8% step rate and mandatory put date of Feb. 15, 2017. The $35.18 million of Series 2016B-2 bonds were priced as 4s to yield 0.90% in 2036; they have a 8% step rate and mandatory put date of Feb. 15, 2018. The $37.60 million of Series 2016B-3 bonds were priced as 5s to yield 1.10% in 2036; they have a 8% step rate and mandatory put date of Feb. 15, 2019. The $27.37 million of Series 2016B-4 bonds were priced as 5s to yield 1.31% in 2036; they have a 8% step rate and mandatory put date of Feb. 15, 2020. The $18.16 million of Series 2016B-5 bonds were priced as 5s to yield 1.51% in 2036; they have a 8% step rate and mandatory put date of Feb. 15, 2021. The $118.59 million of Series 2016B-6 bonds were priced as 5s to yield 1.71% in 2036; they have a 8% step rate and mandatory put date of Feb. 15, 2022.
The issue is backed by the Permanent School Fund guarantee program and is rated triple-A by Moody's, S&P and Fitch.
The New York City Housing Development Corp. came to market with two separate issues totaling $166.83 million.
JPMorgan Securities priced the HDC's $124.29 million of multi-family housing revenue bonds. The $66.45 million of Series 2016A fixed-rate Sustainable Neighborhood bonds were priced at par to yield from 0.35% in 2016 to 2.75% and 2.80% in a split 2027 maturity, and 3.10% in 2031, 3.45% in 2036, 3.65% in 2041 and 3.75% in 2047. The $54.09 million of Series 2016D fixed-rate Sustainable Neighborhood bonds were priced at par to yield from 0.50% and 0.65% in a split 2017 maturity to 2.75% and 2.80% in a split 2027 maturity, and 3.10% in 2031, 3.45% in 2036, 3.65% in 2041 and 3.75% in 2047. The $3.76 million of Series 2015K fixed-rate Sustainable Neighborhood bonds were priced as a remarketing at par to yield 1.15% in 2019. The issue is rated Aa2 by Moody's and AA-plus by S&P.
Barclays Capital priced the HDC's $42.51 million of Series 2016B term-rate multi-family housing revenue bonds. The issue was priced at par to yield 0.43% in 2047 mandatory put date of Oct. 3. The issue is rated VMIG-1 by Moody's and A1-plus by S&P.
CUSIP: Muni Bond ID Requests Up 25% vs. Jan.
Total CUSIP requests for new municipal identifiers rose 25% in February to 1,137 from 910 in January, CUSIP Global Services reported on Wednesday. The January number was a 12% drop from December.
On a year-over-year basis, municipal bond identifier requests were down by 9% in February.
The report tracks requests by issuers for bond identifiers as an early indicator of new volume and suggests a resurgence of municipal issuance in the next several weeks.
"In our last CUSIP Issuance Trends report, we suggested that the mix of activity we were seeing to start the year was indicative of volatility…." said Gerard Faulkner, director of operations for CUSIP Global Services. "Accordingly, the numbers for February have swung in the complete opposite direction. With the interest rate situation still touchy in the U.S. and incredibly uncertain in Europe, we expect that volatility to continue through the first half of the year."
Regionally, municipal bond issuers in Texas demanded the highest volume of new CUSIP identifiers in February, accounting for 139 requests during the month.
Secondary Market
The yield on the 10-year benchmark muni general obligation was steady from 1.88% on Tuesday, while the 30-year muni yield was unchanged from 2.86%, according to the final read of Municipal Market Data's triple-A scale.
Treasuries were weaker as well. The yield on the two-year Treasury rose to 0.90% from 0.87% on Tuesday, while the 10-year Treasury yield gained to 1.89% from 1.83% and the 30-year Treasury bond yield increased to 2.67% from 2.63%.
The 10-year muni to Treasury ratio was calculated on Wednesday at 99.4% compared to 102.6% on Tuesday, while the 30-year muni to Treasury ratio stood at 106.5% versus 108.5%, according to MMD.
Kyle Glazier contributed to this column.
