Top-rated municipal bonds finished a tick stronger on Tuesday, according to traders, as the first big deals of the week came to market.
The 10-year benchmark muni general obligation yield fell one basis point to 2.22% from 2.23% on Monday, while the yield on the 30-year GO dropped one basis point to 2.97% from 2.98%, according to the final read of Municipal Market Data's triple-A scale.
U.S. Treasuries were narrowly mixed on Tuesday. The yield on the two-year Treasury was unchanged from 1.19% on Monday, while the 10-year Treasury yield increased to 2.38% from 2.37%, and the yield on the 30-year Treasury bond was flat from 2.97%.
"Municipal bond yields are unchanged to slightly lower," ICE Data Services said in a Tuesday market comment. "California and New York bonds are one basis point lower in the mid- to high-maturities; high yield market remains unchanged, while taxable yields are moving one basis point lower in the mid-range of the curve."
MSRB Adds New Issue Calendar to EMMA
The MSRB added a new issue calendar (http://emma.msrb.org/ToolsandResources/NewIssueCalendar) for municipal bonds to its EMMA website on Monday. The calendar lists bonds that are scheduled for sale as well as details on issues that recently priced.
"Investors interested in gaining access to municipal bonds in the primary market can use the calendar to research upcoming offerings," MSRB Executive Director Lynnette Kelly said in a press release. "They can contact a municipal securities dealer if they are interested in a particular offering."
The calendar can also help those state and local governments which are considering issuing munis.
"Municipal entities can use the calendar to inform timing on new bond issues, as well as to identify and compare prices of other recently sold bonds," Kelly said. The tool lets users filter upcoming bond issues by state, tax status and whether the issue is bank qualified.
After the official award, the deal is displayed on the calendar in a separate recently sold tab. Those bond listings contain a final pricing scale with coupons and maturities along with ratings.
"This dynamic tool, along with the other data and disclosures available on EMMA, can help all municipal market participants make decisions that are right for them," Kelly said.
This week's market action got underway with the offering of several large deals on Tuesday.
In the competitive arena, Washington state sold about $649.09 million of bonds in three separate offerings.
Wells Fargo Securities won the $462.76 million of Series 2017D various purpose general obligation bonds with a true interest cost of 3.51%. The issue was priced as 5s to yield from 1.03% in 2018 to 3.13% in 2042.
Citigroup won the $137.1 million of Series R-2017C various purpose GO refunding bonds with a TIC of 1.92%. The issue was priced as 5s to yield from 0.90% in 2017 to 2.21% in 2025.
Bank of America Merrill Lynch won the $49.23 million of Series 2017E motor vehicle fuel tax GOs and Series R-2017D motor vehicle fuel tax refunding GOs with a TIC of 3.14%. The $24.73 million of Series 2017E GOs were priced as 5s to yield from 1% in 2018 to 3.21% in 2042. The $24.51 million of Series R-2017 refunding GOs were priced as 5s to yield from 0.90% in 2017 to 2.28% in 2025.
All three deals are rated Aa1 by Moody's Investors Service and AA-plus by S&P Global Ratings and Fitch Ratings.
Since 2007, the Evergreen State has issued about $30 billion of debt, with the largest issuance occurring in 2012 when it sold $3.5 billion of debt. The state sold the least amount of bonds in the past 10 years in 2008, when it offered $1.8 billion of bonds.
The Alpine School District Board of Education, Utah, competitively sold $150.43 million of Series 2017 GO school building and refunding bonds under the Utah school bond guaranty program. Citi won the bonds with a TIC of 2.61%. The issue was priced to yield from 0.95% with a 5% coupon in 2018 to 3.35% with a 3.25% coupon in 2034. The deal is rated triple-A by Moody's and Fitch.
Hennepin County, Minn., competitively sold $116.89 million of Series 2017A first lien sales tax revenue refunding bonds. BAML won the bonds with a TIC of 2.80%. The deal was priced as 5s to yield from 0.97% in 2017 to 2.65% in 2032. The deal is rated triple-A by S&P and Fitch.
In the negotiated arena, Goldman Sachs priced the Trinity Health Credit Group's $333.87 million composite bond offering from four conduit issuers in states with Trinity facilities.
The Michigan Finance Authority's $162.06 million of Series 2017MI hospital revenue and refunding bonds were priced as 5s to yield from 2.92% in 2027 to 3.20% in 2031; a split 2046 maturity was priced as 4s to yield 4.10% and as 5s to yield 3.70%. The Idaho Health Facilities Authority's $54.87 million of Series 2017ID hospital revenue bonds were priced as 4s to yield 4.05% and as 5s to yield 3.63% in a split 2046 maturity.
The Maryland Health and Higher Educational Facilities Authority's $29.44 million of Series 2017MD revenue bonds were priced as 4s to yield 3.98% and as 5s to yield 3.57% in a split 2046 maturity. The Franklin County, Ohio's $87.52 million of Series 2017OH were priced as 4s to yield 4.10% and as 5s to yield 3.70% in a split 2046 maturity. The Trinity offering is rated Aa3 by Moody's and AA-minus by S&P and Fitch.
Loop Capital Markets priced the Chicago Transit Authority's $296.94 million of Series 2017 second lien sales tax receipts revenue bonds.
The issue was priced as 4s to yield 4.30% and as 5s to yield 4.17% in a split 2046 maturity and as 5s to yield 4.13% and 4.28% in a split 2051 maturity. The first half of the 2046 and 2051 maturities, totaling $35 million, were insured by Assured Guaranty Municipal. The deal is rated A-plus by S&P and AA-minus by Kroll Bond Rating Agency.
Barclays Capital priced the Miami University of Ohio's $154.97 million of Series 2017 general receipts revenue and refunding bonds. The issue was priced to yield from 1.26% with a 4% coupon in 2018 to 3.28% with a 5% coupon in 2037; a 2041 maturity was priced as 5s to yield 3.35%. A 2017 maturity was offered as a sealed bid. The deal is rated Aa3 by Moody's and AA by Fitch.
Citigroup priced Rochester, Minn.'s $109.13 million of Series 2017A electric utility revenue and refunding bonds. The issue was priced as 5s to yield from 1.18% in 2018 to 3.15% in 2037, 3.22% in 2042 and 3.28% in 2047. A 2017 maturity was offered as a sealed bid. The deal is rated Aa3 by Moody's and AA-minus by Fitch.
Citigroup priced the Board of Regents of the Texas A&M University System's $388.71 million of Series 2017A taxable revenue financing system bonds. The taxable rate-lock issue was priced at par to yield from 0.70% in 2017 to 3.531% in 2032. The deal is rated triple-A by Moody's, S&P and Fitch.
On Wednesday, Morgan Stanley is expected to price the U.S. Virgin Islands Public Finance Authority's $216.35 million of Series 2016A senior lien working capital bonds and Series 2016B subordinate lien working capital bonds. The deal is rated BB by S&P and Fitch.
Morgan Stanley is also set to price the Regents of the University of Michigan's $449.24 million of Series 2017A general revenue bonds.
Piper Jaffray is expected to price the University of Connecticut's $300 million of Series 2017A GOs. The deal is rated Aa3 by Moody's and AA-minus by S&P and A-plus by Fitch.
BAML is set to price the Illinois Finance Authority's $198 million of Series 2017A revenue bonds for Edward-Elmhurst Healthcare. The deal is rated A by S&P and Fitch.
In the competitive sector, the Highline School District No. 401, Wash., is selling $206.895 million of Series 2017 unlimited tax GOs. The deal, backed by the Washington state credit enhancement program, is rated Aa1 by Moody's and AA-plus by S&P.
Seattle, Wash., is competitively selling $189.665 million of Series 2017 water system improvement and refunding revenue bonds. The deal is rated Aa1 by Moody's and AA-plus by S&P.