Top-rated municipal bonds were steady at mid-session, according to traders, as two big deals from California and New York were priced for retail investors.
Citigroup priced California’s $2.36 billion of general obligation bonds for retail investors on Monday. The deal will be priced for institutions on Tuesday.
The $789.42 million of various purpose GOs were priced as 3s to yield 0.81% in part of a 2018 split maturity, as 3s to yield 0.98% in part of a 2019 split maturity as 4s to yield 3.52% and as 5s to yield 3.17% in a split 2045 maturity. No retail orders were taken in the second half of the 2018 and 2019 maturities or in the 2020-2026 maturities. The 2016 and 2017 maturities were offered as sealed bids.
The $69.98 million of school facilities GOs had no retail order period for the 2031 and 2032 maturities.
The $1.25 billion of various purposed GO refunding bonds were priced to yield from 0.81% with 4% and 5% coupons in a split 2018 maturity to 3.32% with a 4% coupon and 2.97% with a 5% coupon in a split 2036 maturity. There were no retail orders taken in the 2029-2035 maturities. The 2016 and 2017 maturities were offered as sealed bids.
The deal is rated Aa3 by Moody’s Investors Service, AA-minus by Standard & Poor’s and A-plus by Fitch Ratings.
Bank of America Merrill Lynch priced the Empire State Development Corp. State Urban Development Corp.’s $1.25 billion of Series 2016A general purpose personal income tax revenue bonds for retail investors on Monday.
The issue was priced to yield from 0.66% with a 5% coupon in 2018 to 2.25% with a 5% coupon in 2026, and as 4s to yield 3.24% in 2036 to 3.50% at par in 2038; no retail orders were taken in the 2027-2032 or 2034-2035 maturities. The bonds are rated triple-A by S&P and AA-plus by Fitch.
Total volume for the week is estimated at $8.64 billion, consisting of $7.10 billion of negotiated deals and $1.54 billion of competitive sales.
BAML is set to price Indiana Finance Authority’s $175 million of Series 2016A&B state revolving fund program green bonds on Tuesday. The deal is rated triple-A by Moody’s, S&P and Fitch.
In the competitive arena, Boston is selling $148.11 million of bonds on Tuesday in two sales consisting of $140 million of Series 2016A GOs and $8.11 million of Series 2016B GOs. The deals are rated triple-A by Moody’s and S&P.
Also on Tuesday, Lancaster, Pa., is competitively selling $125.8 million of Series 2016 GO combined purpose bonds. The deal is rated A1 by Moody’s.
Mesirow Financial is expected to price Sweetwater Union High School, Calif.’s $264.5 million of GOs on Wednesday. The deal is rated A1 by Moody’s A-plus by S&P and triple-A by Fitch.
Bank in the negotiated sector, the Las Vegas Valley Water District, Nev., is coming to market with two sales totaling $716 million on Thursday. Citi is set to price the $608 million of GO improvement and refunding bonds. The deal is rated Aa1 by Moody’s and AA by S&P. Morgan Stanley is expected to price $108.39 million of limited tax GOs additionally secured by pledged revenues. This deal is rated Aa1 by Moody’s and AA-plus by S&P.
Citi is set to price Dallas Independent School District, Texas’ $262 million of unlimited tax school building bonds on Thursday.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $179.4 million to $11.65 billion on Monday. The total is comprised of $3.16 billion of competitive sales and $8.49 billion of negotiated deals.
Secondary Market
The yield on the 10-year benchmark muni general obligation was steady from 1.90% on Friday, while the 30-year muni yield was unchanged from 2.90%, according to a read of Municipal Market Data's triple-A scale.
Treasuries were narrowly mixed on Monday. The yield on the two-year Treasury rose to 0.89% from 0.87% on Friday, while the 10-year Treasury yield gained to 1.90% from 1.89% and the 30-year Treasury bond yield decreased to 2.70% from 2.71%.
The 10-year muni to Treasury ratio was calculated on Friday at 101.6% compared to 102.2% on Thursday, while the 30-year muni to Treasury ratio stood at 107.4% versus 108.3%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 32,919 trades on Friday on volume of $7.40 billion.
The Prior Week's Most Actively Traded Issues
Revenue bonds comprised 52.30% of new issuance in the week ended March 4, up from 50.72% in the previous week, according to Markit. General obligation bonds comprised 40.31% of total issuance, down from 41.06%, while taxable bonds made up 7.39%, down from 8.22%,
Some of the most actively traded issues by type were in California, New York and Ohio. In the GO bond sector, the Los Angeles Unified School District, Calif., 4s of 2040 traded 31 times. In the revenue bond sector, the New York City Municipal Water Finance Authority 4s of 2038 traded 136 times. And in the taxable bond sector, the Ohio State University 3.798s of 2046 traded 64 times, Markit said.
