Municipal bonds ended stronger on Tuesday, traders said, as a bevy of new deals totaling well over $4 billion hit the market.
Bank of America Merrill Lynch led the pricing pack, offering the Massachusetts School Building Authority's $744.73 million of Series 2015C senior dedicated sales tax refunding bonds to institutional investors after holding a one-day retail order period on Monday. The deal was priced to yield from 0.25% with a 5% coupon in 2016 and to yield from 0.92% with a 2% coupon in 2018 to 3.75% at par and 3.18% with a 5% coupon in a split 2037 maturity. The bonds were rated Aa2 by Moody's Investors Service and AA-plus by Standard & Poor's and Fitch Ratings.
RBC Capital Markets priced the New Jersey Transportation Trust Fund Authority's $626.76 million of Series 2015 AA transportation program bonds. The deal was priced to yield from 2.32% with a 3% coupon in 2017 to 4.875% at par in 2035. A 2038 maturity was priced as 4 3/4s to yield 4.94%, a 2041 maturity was priced as 5s to yield 5.05% and a 2046 maturity was priced at par to yield 5.05%. The deal was rated A3 by Moody's and A-minus by S&P and Fitch.
Since 2005, the NJTTFA has issued roughly $17.46 billion of debt. The authority sold the most bonds in 2005 and 2006, when it issued $2.6 billion and $2.8 billion, respectively. The NJTTFA sold the least in bonds in 2009 and 2014, when it came to market with $713 million and $1.1 billion, respectively. On average over the past 10 years, the NJTTFA has come to market roughly 2.3 times a year.
Barclays Capital Markets priced the state of Connecticut's $650 million of Series F and G general obligation bonds. The $585 million of Series F GOs were priced as 2s, 4s and 5s to yield 1.20% in a triple-split 2018 maturity and as 2s and 5s to yield 1.68% in a split 2020 maturity. The bonds were also priced as 2s and 4s to yield from 1.93% in a split 2021 maturity to 3.43% with a 5% coupon in 2034. The 2016-2017 maturities were offered as sealed bids. The $65 million of Series G GO green bonds were priced as 2s, 4s and 5s to yield 1.43% in a triple-split 2019 maturity and as 4s and 5s to yield 3.85% and 3.47% in a split 2035 maturity. The deal was rated Aa3 by Moody's and AA by S&P, Fitch and Kroll Bond Rating Agency.
Ramirez & Co. priced the New York City Municipal Water Finance Authority's $349.85 million of Fiscal 2016 Series BB water and sewer system second general resolution revenue bonds for institutions after holding a retail order period on Monday. The $328.03 million of Subseries BB-1 bonds were priced as 5s to yield 3.49% in 2046 and as 4s to yield 3.82% in 2046. The $21.82 million of Subseries BB-2 bonds were priced as 5s to yield 1.20% in 2021. The issue was rated Aa1 by Moody's and AA-plus by S&P and Fitch.
JPMorgan Securities priced two deals for the Long Island Power Authority totaling $266.23 million. The $117.23 million of Series 2015B electric system general revenue bonds were priced for institutions after a one-day retail order period. The bonds were priced to yield from 1.36% with 4% and 5% coupons in a split 2019 maturity to 3.67% with a 5% coupon in 2038; a 2040 maturity was priced as 4s to yield approximately 4.032% and a 2045 maturity was priced as 5s to yield 3.75%. JPMorgan also priced LIPA's $149 million of Series 2015C electric system LIBOR floating rate tender notes. The notes, which have a maturity date of 2033, were priced at par to yield 88 basis points above the one-month LIBOR rate. The deal has a mandatory tender in 2018. Both sales were rated Baa1 by Moody's and A-minus by S&P and Fitch.
Morgan Stanley priced the city of Dallas, Texas' $197.08 million of Series 2015 general obligation refunding and improvement bonds for Dallas, Denton, Collin and Rockwall Counties. The issue was priced as 5s to yield from 0.52% in 2017 to 3.15% in 2034. The bonds were rated AA by S&P and AA-plus by Fitch.
BAML priced the city of Miami Beach, Fla.'s $195.68 million of Series 2015 resort tax revenue bonds. The issue was priced to yield from 0.38% with a 4% coupon in 2016 to 3.42% with a 5% coupon in 2035; a 2040 maturity was priced as 5s to yield 3.61% while a split 2045 maturity was priced at par to yield 4% and as 5s to yield 3.69%. The bonds were rated AA3 by Moody's and AA-minus by S&P.
Citi priced the city of Phoenix Civic Improvement Corp.'s $115 million of junior lien airport revenue and revenue refunding bonds, not subject to the alternative minimum tax. The $96.36 million of Series 2015A revenue bonds were priced as 5s to yield from 0.40% in 2016 to 3.42% in 2035; a 2040 split maturity was priced as 4s to yield 3.97% and as 5s to yield 3.52% and a 2045 maturity was priced as 5s to yield 3.63%. The $18.69 million of Series 2015B revenue refunding bonds were priced as 5s to yield 3.38% in 2034. The issue is rated A1 by Moody's and A-plus by S&P.
Ramirez priced the San Francisco State Building Authority's $102.87 million of Series 2015A lease revenue refunding bonds for the San Francisco Civic Center complex. The bonds were priced to yield from 0.44% with a 2% coupon in 2016 to 1.76% with 5% and 4% coupons in a split 2021 maturity. The issue was rated A1 by Moody's, A-plus by S&P and A by Fitch.
In the competitive arena, Wisconsin sold $225 million of Series 2016A transportation revenue bonds. Bank of America Merrill Lynch won the deal with a true interest cost of 3.37%. The issue was priced to yield from 0.62% with a 5% coupon to 3.03% with a 5% coupon in 2036. The deal was rated AA-plus by Fitch.
The Maryland Water Quality Finance Administration sold $180 million of Series 2015 Bay restoration fund revenue bonds. Barclays Capital Markets won the deal with a true interest cost of 2.59%. The deal was priced to yield from 0.87% with a 5% coupon in 2018 to 3.13% with a 3% coupon in 2030. The issue was rated Aa2 by Moody's and AA by S&P.
And the Omaha Metropolitan Utilities District, Neb., sold $188.90 million of Series 2015 water system improvement and refunding revenue bonds. Citigroup won the deal with a true interest cost of 2.95%. The issue was priced to yield from 0.43% with a 5% coupon in 2016 to 3.43% with a 3.25% coupon in 2032; a 2035 maturity was priced as 3 1/2s to yield 3.70%. The bonds were rated A1 by Moody's and A-plus by S&P.
Secondary Market
Top-quality municipal bonds finished stronger on Tuesday. The yield on the 10-year benchmark muni general obligation was two basis points lower at 2.14% from 2.16% on Monday, while the 30-year yield was off three basis points to 3.11% from 3.14%, according to the final read of Municipal Market Data's triple-A scale.
Treasury prices were mostly higher on Tuesday. The two-year Treasury yield rose to 0.85% from 0.84% on Monday while the 10-year Treasury yield fell to 2.25% from 2.27% and the 30-year yield decreased to 3.04% from 3.07%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 94.1% from 94.9% on Tuesday, while the 30-year muni to Treasury ratio stood at 101.1% compared to 102.1%, according to MMD.
