Top-quality municipal bonds were unchanged at mid-session, according to traders as more supply hit the screens, led by the Texas Water Development Board deal.
Primary Market
Bank of America Merrill Lynch priced the Texas Water Development Board's $599.33 million of Series 2016 Master Trust State Water Implementation Revenue Fund for Texas revenue bonds for institutions on Tuesday after holding a one-day retail order period on Monday.
The issue was priced to yield from 0.80% with a 4% coupon in 2018 to 3.02% with a 3.125% coupon and 2.41% with a 5% coupon in a split 2036 maturity. A split 2041 maturity was priced as 4s to yield 2.76% and as 5s to yield 2.51%; a split 2046 maturity was priced as 4s to yield 2.81% and as 5s to yield 2.56%; a 2047 maturity was priced as 5s to yield 2.57%; and a split 2051 maturity was priced as 3 1/2s to yield 3.20% and as 4s to yield 2.89%. A 2017 maturity was offered as a sealed bid.
On Monday, the $591.74 million issue was priced for retail to yield from 0.80% with a 4% coupon in 2018 to 2.98% with a 3% coupon in a split half of a 2036 maturity; a split half of a 2046 maturity was priced as 4s to yield 2.76% and a split half of a 2051 maturity was priced as 3 1/2s to yield 3.11%.
No retail orders were taken in: the 2028-2029 and 2031-2032 maturities, a split half of a 2034 maturity, 2035, a split half of a 2036 maturity, a split half of a 2041 maturity, a split half of a 2046 maturity, the 2047 maturity or a split half of a 2051 maturity.
The SWIRFT bonds are rated triple-A by S&P Global Ratings and Fitch Ratings.
Since 2006, the water board has issued almost $4.5 billion of bonds, with the most issuance occurring in 2015 when it sold about $1.3 billion of debt. The board did not come to market in 2011 or 2014.
Goldman Sachs is set to price the Pennsylvania Turnpike Commission's $649.89 million of subordinate revenue refunding bonds.
The deal is expected to consist of $391.52 million of Subseries A bonds, $82.17 million of Subseries B taxables and $176.2 million of motor license fund enhanced bonds.
The two subseries are rated A3 by Moody's Investors Service and A-minus by Fitch, while the enhanced motor license series is rated A2 by Moody's and A-minus by Fitch.
RBC Capital Markets received the written award on the American Municipal Power Inc.'s $209.53 million of combined hydroelectric projects revenue green bonds.
The issue was priced to yield from 1.12% with a 4% coupon in 2020 to 2.76% with a 5% coupon in 2038; a 2041 maturity was priced as 5s to yield 2.81% and a split 2046 maturity was priced as 5s to yield 2.86% and as 4s to yield 3.13%. The deal is rated A2 by Moody's, A by S&P and A-minus by Fitch.
In the competitive arena, the New York City Municipal Water Finance Authority sold $200 million of Fiscal 2017 Series AA water and sewer system second general resolution revenue bonds on Tuesday.
JPMorgan Securities won the deal with a true interest cost of 3.25%. Pricing information was not immediately available. The deal is rated AA-plus by S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $220.6 million to $13.41 billion on Tuesday. The total is comprised of $4.26 billion of competitive sales and $9.16 billion of negotiated deals.
Secondary Market
The yield on the 10-year benchmark muni general obligation was steady from 1.57% on Monday, while the yield on the 30-year was flat from 2.33%, according to a read of Municipal Market Data's triple-A scale.
Treasuries were narrowly mixed on Tuesday. The yield on the two-year Treasury was unchanged from 0.77% on Monday, the 10-year Treasury yield fell to 1.67% from 1.70% and the yield on the 30-year Treasury bond decreased to 2.40% from 2.44%.
The Federal Open Market Committee will begin its monetary policy meeting on Tuesday and will announce its decision on interest rates on Wednesday. Most policy experts believe the Fed will not raise rates at this meeting.
On Monday, the 10-year muni to Treasury ratio was calculated at 92.7% compared to 92.5% on Friday, while the 30-year muni to Treasury ratio stood at 95.3% versus 94.4%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 32,056 trades on Monday on volume of $8.37 billion.
