Munis end stronger as deals sell

Municipal bonds finished stronger on Wednesday as the bulk of the week’s new issue supply swept into the market.

Primary market
Morgan Stanley priced Connecticut’s $370 million of state revolving fund general revenue bonds for retail investors ahead of the institutional pricing on Thursday.

The $250 million of Series 2017A SRF green bonds were priced for retail to yield from 1.02% with a 3% coupon in 2020 to 3.08% with 3% and 4% coupons in a split 2036 maturity. The 2018 and 2019 maturities were offered as sealed bids. No retail orders were taken in the 2029-2032, 2034-2035 or 2037 maturities.

The $120 million of Series 2017B refunding bonds were priced for retail as 5s to yield 1.16% in 2021 and 1.46% in 2023. No retail orders were taken in the 2020, 2022 or 2024-2027 maturities.

The deal is rated triple-A by Moody’s Investors Service, S&P Global Ratings and Fitch Ratings.

Bank of America Merrill Lynch priced for retail the Louisiana Local Government Environmental Facilities and Community Development Authority’s $249.09 million of Series 2017A tax-exempt and Series 2017B taxable hospital refunding revenue bonds for the Women’s Hospital Foundation.

The $229.12 million of Series 2017A tax-exempts were priced for retail to yield from 1.74% with a 3% coupon in 2022 to 3.37% with a 5% coupon in 2027; a 2041 maturity was priced as 4s to yield 3.80% and a 2044 maturity was priced as 5s to yield 3.49%.

The $19.97 million of Series 2017B taxables were priced for retail at par to yield from 2.05% in 2018 to 3% in 2022.

The deal is rated A2 by Moody’s and A by S&P.

Piper Jaffray priced the Austin Independent School District, Texas’ $219.36 million of Series 2017 unlimited tax school building and refunding bonds.

The issue was priced to yield from 1% with a 5% coupon in 2019 to 2.82% with a 5% coupon in 2037. The 2018 maturity was offered as a sealed bid.

The deal, which is backed by the Permanent School Fund guarantee program, is rated triple-A by Moody’s and Fitch.

Morgan Stanley priced the Northampton County General Purpose Authority, Pa.’s $136.65 million of refunding and revenue bonds for Lafayette College.

The issue was priced as 5s to yield 1.65% in 2023, as 5s to yield 2.30% in 2027, as 3 1/8s to yield 3.23% and as 4s to yield 3.16% and as 5s to yield 2.89% in a triple split 2034 maturity and as 5s to yield 3.16% in 2047.

The deal is rated Aa3 by Moody’s and A-plus by S&P.

Citigroup priced Clark County, Nev.’s $146.3 million of Series 2017C airport system junior subordinate lien revenue bonds, subject to the alternative minimum tax.

The issue was priced as 5s to yield 1.55% in 2021. The deal is rated A1 by Moody’s and A-plus by S&P.

In the competitive arena, Arlington County, Va., sold $185.1 million of Series 2017 general obligation public improvement bonds.

JPMorgan Securities won the bonds with a true interest cost of 2.496%. The deal was priced to yield from 0.73% with a 2% coupon in 2017 to 2.83% with a 4% coupon in 2036.

The deal is rated triple-A by Moody’s, S&P and Fitch.

BB-060117-MUN

Since 2007, the county has issued roughly $1.75 billion of securities, with the most issuance occurring in 2010 when it sold $219 million. The county has been consistent the past decade, always selling between $100 and $220 million each year - with the exception of 2015 when it issued just $77.4 million.

On a smaller scale, Boston sold $59.31 million of Series 2017B general obligation refunding bonds.

BAML won the bonds with a TIC of 1.40%. The issue was priced as 5s to yield from 0.78% in 2018 to 1.01% in 2021 and from 1.28% in 2023 to 1.86% in 2027 and as 2s to yield 2.13% in 2028.

The deal is rated triple-A by Moody’s and S&P.

Secondary market
The yield on the 10-year benchmark muni general obligation fell three basis points to 1.90% from 1.93% on Tuesday, while the 30-year GO yield dropped three basis points to 2.74% from 2.77%, according to the final read of Municipal Market Data's triple-A scale.

U.S. Treasuries were stronger. The yield on the two-year Treasury slipped to 1.27% from 1.28% on Tuesday as the 10-year Treasury yield dipped to 2.20% from 2.21% while the yield on the 30-year Treasury bond decreased to 2.86% from 2.88%.

The 10-year muni to Treasury ratio was calculated at 86.5% on Wednesday, compared with 87.2% on Tuesday, while the 30-year muni to Treasury ratio stood at 95.8%, versus 96.0%, according to MMD.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 38,659 trades on Tuesday on volume of $8.30 billion.

For reprint and licensing requests for this article, click here.
Primary bond market Secondary bond market State of Connecticut
MORE FROM BOND BUYER