Top-shelf municipal bonds finished steady to stronger on Wednesday, traders said, as more new supply swept into the market, led by over $1 billion of volume from the New York City Transitional Finance Authority.
Siebert Brandford Shank priced the NYC TFA's $800 million of tax-exempt future tax secured subordinate Fiscal 2017 Subseries A-1 bonds for institutions after a two-day retail order period.
The issue was priced to yield from 0.69% with 4% and 5% coupons in a split 2019 maturity to 2.65% with a 2.5% coupon in 2038; a 2040 maturity was priced as 5s to yield 2.28% and a 2042 maturity was priced as 4s to yield 2.55%. A 2018 maturity was offered as a sealed bid.
On Tuesday, the issue was priced for retail to yield from 0.69% with 4% and 5% coupons in a split 2019 maturity to 2.44% with a 4% coupon in 2042; no retail orders were taken in the 2031-2034, 2039 or 2041 maturities.
The bonds are rated Aa1 by Moody's Investors Service and triple-A by S&P Global Ratings and Fitch Ratings; all three agencies have a stable outlook on the credit.
"The TFA deal was a perfect illustration of what the market was like today and how it's been for a while," a New York trader said on Wednesday. "You get a little green on the screen, and then it gets bumped back to higher prices [because] there is an overlay of need for bonds. I don't see that changing."
Also on Wednesday, the TFA competitively sold two separate taxable offerings totaling $250 million. RBC Capital Markets won the $186.9 million of Fiscal 2017 Series A Subseries A-2 future tax secured bonds with a true interest cost of 1.98%. Bank of America Merrill Lynch won the $63.1 million of Fiscal 2017 Series A Subseries A-3 future tax secured bonds with a TIC of 2.58%. No pricing information on either of the taxable deals was available.
Loop Capital Markets priced the Michigan Department of Transportation's $612.99 million of Series 2016 grant anticipation refunding bonds.
The issue was priced as 5s to yield from 0.66% in 2018 to 2.07% in 2027. The Garvee deal is rated A2 by Moody's and AA by S&P.
Ramirez & Co. priced the State of New York Mortgage Agency's $123.81 million of homeowner mortgage revenue bonds for institutions after holding a one-day retail order period.
The $100.72 million of Series 197 bonds, which are not subject to the alternative minimum tax, were priced at par to yield from 1.40% and 1.45% in a split 2022 maturity to 2.45% and 2.50% in a split 2029 maturity; a 2031 maturity was priced at par to yield 2.60%. A 2044 planned amortization class bond, with an average life of five years, was priced as 3 1/2s to yield 1.75%.
The $23.1 million of Series 198 AMT bonds were priced to yield from 0.70% and 0.80% in a split 2017 maturity to 1.75% in 2022. The SONYMA deal is rated Aa1 by Moody's.
Ramirez also priced Miami-Dade County's $309.5 million of Series 2016 subordinate special obligation refunding bonds.
The $219.51 million of current interest bonds were priced to yield from 0.75% with a 3% coupon in 2018 to 2.88% with a 4% coupon in 2040. The $89.999 million of capital appreciation bonds were priced to yield from 3.17% in 2031 to 3.54% in 2028. The deal is rated A-plus by S&P and Fitch.
Since 2006, Miami-Dade County has issued about $15.9 billion of debt, with the largest issuance occurring in 2010 when it sold $2.4 billion of securities. The county has only issued less than $1 billion two times and that was in 2006 and 2011.
JPMorgan Securities priced the Los Angeles Community College District's $300 million of 2008 Election Series I general obligation bonds.
The issue was priced to yield from 0.49% and 0.54% with 2% coupons in a split 2017 maturity to 2.32% with a 4% coupon in 2035; a 2040 maturity was priced as 3s to yield 2.86%. The deal is rated Aa1 by Moody's and AA-plus by S&P.
BAML priced the Wisconsin Public Finance Authority's $137.27 million of Series 2016A hospital revenue refunding bonds for the Renown Regional Medical Center.
The issue was priced to yield from 0.99% with a 4% coupon in 2019 to 3.13% with a 3% coupon in 2036; a 2040 maturity was priced as 5s to yield 2.74%. The deal is rated A2 by Moody's and A by S&P.
BAML also priced the Port of Morrow, Ore.'s $320.96 million of taxable Series 2016-1 transmission facilities revenue bonds for the Bonneville Cooperation Project No. 4. The issue was priced at par to yield 1.809% in 2022, 1.909% in 2023 and 2.987% in 2036. The deal is rated Aa1 by Moody's and AA by Fitch.
In the short-term sector, BAML priced Oregon's $593.42 million of Series 2016A full faith and credit tax anticipation notes. The TANs were priced as 2s to yield 0.59% in 2017. The deal is rated MIG1 by Moody's, SP1-plus by S&P and F1-plus by Fitch.
In the competitive arena, Clark County, Nev., sold $285.41 million of Series 2016B limited tax GO bond bank refunding bonds additionally secured by pledged revenues.
JPMorgan Securities won the deal with a TIC of 2.19%. The issue was priced to yield from 0.64% with a 5% coupon in 2017 to 2.37% with a 4% coupon in 2032; a 2034 maturity was priced as 4s to yield 2.47%. The deal is rated Aa1 by Moody's and AA by S&P.
Since 2006, Clark County has issued about $12.4 billion of debt, with the largest issuance occurring in 2006 when it sold $2.6 billion of securities. The county has slowed its issuance, not selling more than $700 million since 2010, after offer while offering more than $1 billion in each of the years from 2006 through 2010.
Secondary Market
The yield on the 10-year benchmark muni general obligation finished unchanged from 1.38% on Tuesday, while the yield on the 30-year muni fell one basis point to 2.01% from 2.02%, according to the final read of Municipal Market Data's triple-A scale.
U.S. Treasuries were stronger on Wednesday. The yield on the two-year Treasury dipped to 0.67% from 0.68% on Tuesday as the 10-year Treasury yield dropped to 1.47% from 1.52% and the yield on the 30-year Treasury bond decreased to 2.18% from 2.23%.
"Today was firmer than yesterday, but barely," a second New York trader said on Wednesday. "It feels better just because Treasuries bounced off good support after falling past few days. New issues got done, but not with an overwhelming subscription."
The 10-year muni to Treasury ratio was calculated at 94.1% on Wednesday compared to 91.3% on Tuesday, while the 30-year muni to Treasury ratio stood at 92.4% versus 90.5%, according to MMD.
