Top-rated municipal bonds finished stronger on Wednesday, according to traders, after the Federal Open Market Committee in a widely expected move left its fed funds target rate unchanged at between 0.25% and 0.50%.
Most Fed watchers now expect the FOMC to raise rates by 25 basis points at its next meeting on Dec. 13-14, which could be the only increase in 2016.
Secondary Market
The yield on the 10-year benchmark muni general obligation fell four basis points to 1.70% from 1.74% on Tuesday, while the yield on the 30-year dropped three basis points to 2.53% from 2.56%, according to the final read of Municipal Market Data's triple-A scale.
U.S. Treasuries were also stronger on Wednesday. The yield on the two-year slipped to 0.82% from 0.83% on Tuesday, the 10-year Treasury declined to 1.80% from 1.82% and the yield on the 30-year Treasury bond decreased to 2.56% from 2.57%.
Primary Market
More supply hit municipal traders' screens on Wednesday.
Raymond James & Associates priced the Virginia Resource Authority's $146.77 million of Series 2016C infrastructure revenue bonds under the state's Pooled Financing Program.
The issue was priced to yield from 0.88% with a 5% coupon in 2018 to 3.37% with a 3.25% coupon in 2038; a 2041 maturity was priced as 4s to yield 3.01% and a 2046 maturity was priced as 4s to yield 3.06%. A 2017 maturity was offered as a sealed bid.
The deal is rated triple-A by Moody's Investors Service and S&P Global Ratings.
Since 2006, the VRA has sold about $4.8 billion of securities, with the largest issuance coming in 2009 when it sold $618 million of debt. The VRA's lowest issuance was in 2006, when it sold $187 million. Wednesday's sale puts the authority over $300 million for the year.
RBC Capital Markets priced the Connecticut Housing Finance Authority's $170.88 million of housing mortgage finance program bonds in six series.
The $25.27 million of Series 2016F Subseries F1 bonds were priced at par to yield 3.05% in 2031 and 3.25% in 2033.
The $94.61 million Series 2016F Subseries F2 bonds subject to the alternative minimum tax were priced at par to yield from 0.90% and 1.05% in a split 2017 maturity to 2.85% and 2.90% in a split 2027 maturity; a 2039 term bond was priced as 3 1/2s to yield about 2.03%.
The $5.08 million of Series 2016F Subseries F3 bonds were priced at par to yield 2.20% in 2025, 2.45% in 2026 and 2.55% in 2027.
The $8.41 million of Series 2016F Subseries F4 bonds were priced at par to yield from 1.55% in 2021 to 2.55% and 2.60% in a split 2027 maturity and 3.05% in 2031 and 3.30% in 2034.
The $9.35 million of Series 2016F Subseries F6 taxable bonds were not reoffered.
The $18.18 million of Series 2016F Subseries G1 bonds were priced at par to yield from 1% in 2018 to 2.55% and 2.60% in a split 2027 maturity, 3.05% in 2031, 3.40% in 2036 and 3.60% in 2041.
The deal is rated triple-A by Moody's and S&P.
Since 2006, the CHFA has sold about $6.6 billion of securities, with the largest issuance coming in 2008 when the authority sold $905 million of debt. The CHFA's lowest issuance was in 2013, when it sold just $232 million. The latest sale will put the authority over $700 million for the year, the highest yearly total since 2012.
Bank of America Merrill Lynch priced the South Carolina Jobs-Economic Development Authority's $101.53 million of Series 2016 hospital refunding revenue bonds for the Anmed Health project.
The issue was priced to yield from 1.35% with a 5% coupon in 2020 to 3.30% with a 5% coupon in 2038. The deal is rated A-plus by S&P and Fitch Ratings.
