Top-quality municipal bonds were mixed at midday, traders said, as the hefty California and New York City sales were priced for institutions.
Secondary Market
The 10-year benchmark muni general obligation yield on Tuesday was unchanged from 2.42% on Monday, while the yield on the 30-year GO rose as much as one basis point from 3.18%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were weaker on Tuesday. The yield on the two-year Treasury rose to 1.32% from 1.30% on Monday, while the 10-year Treasury yield gained to 2.51% from 2.49%, and the yield on the 30-year Treasury bond increased to 3.11% from 3.10%.
On Monday, the 10-year muni to Treasury ratio was calculated at 97.1% compared to 96.9% on Friday, while the 30-year muni to Treasury ratio stood at 102.7%, versus 103.2%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,720 trades on Monday on volume of $8.17 billion.
Primary Market
Citigroup priced the state of California's $2.46 billion of various purpose general obligation bonds for institutions on Tuesday after a one-day retail order period.
The $513.53 million of various purpose GO bonds were priced to yield from 1.41% with a 5% coupon in 2020 to 2.38% with a 5% coupon in 2024; a split 2046 maturity was priced as 4s to yield 3.93% and as 5s to yield 3.52%. The 2017 maturity was offered as a sealed bid.
The $1.95 billion of various purpose GO refunding bonds were priced to yield from 1.18% with a 3%, 4% and 5% coupons in a 2019 triple split maturity to 3.87% with a 4% coupon and 3.47% with a 5% coupon in a split 2038 maturity. The 2018 maturity was offered as a sealed bid.
The deal is rated Aa3 by Moody's Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings.
Since 2007, the Golden State has sold about $97.24 billion of bonds, with the most issuance coming in 2009 when it offered $23.18 billion. The state has issued more than $6 billion every year except for 2011 and 2012 in that period. Last year California was the biggest municipal bond issuer in the country.
JPMorgan Securities priced the New York City Transitional Finance Authority's $800 million of future tax secured subordinate refunding bonds for institutions after holding a two-day retail order period.
The $761.12 million of Fiscal 2017 Series C future tax secured tax-exempt subordinated bonds were priced for institutions to yield from 1.23% with 4% and 5% coupons in a split 2019 maturity to 3.64% with a 3.50% coupon and 3.61% with a 4% coupon in a split 2034 maturity. A 2018 maturity was offered as a sealed bid.
The $38.88 million of Fiscal 2017 Series D future tax secured tax-exempt subordinated bonds were priced for institutions to yield from 1.23% with a 3% coupon in 2019 to 3.64% with a 3.50% coupon in 2034. The 2017 and 2018 maturities were offered as sealed bids.
The deal is rated Aa1 by Moody's and triple-A by S&P and Fitch.
Goldman Sachs priced the New Jersey Educational Facilities Authority's $338.44 million of Series 2017B revenue refunding bonds for Princeton University.
The issue was priced to yield from 1.07% with a 4% coupon in 2019 to 2.27% with a 5% coupon in 2025 and to yield from 2.49% with a 5% coupon in 2027 to 3.42% with a 4% coupon in 2036. A 2018 maturity was offered as a sealed bid.
The deal is rated triple-A by Moody's and S&P.
In the competitive arena on Tuesday, Wisconsin sold $340.39 million of Series 2017 unlimited tax GOs.
Citi won the bonds with a true interest cost of 3.44%. The issue was priced as 5s to yield from 1.67% in 2022 to 3.18% in 2037. The deal is rated Aa2 by Moody's and AA by S&P and Fitch.
Boston sold $150 million of Series 2017A unlimited tax GOs. Citi won the deal with a TIC of 2.67%. The issue was priced to yield from 0.77% with a 5% coupon in 2018 to 3.46% with a 3.25% coupon in 2037. The deal is rated triple-A by Moody's and S&P.
Sullivan County, Tenn., competitively sold $140 million of Series 2017 GOs. Wells Fargo Securities won the deal with a TIC of 3.07%. The issue was priced to yield from 1.14% with a 5% coupon in 2019 to 3.82% with a 3.75% coupon in 2047. The deal is rated Aa2 by Moody's.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $725.73 million to $15.57 billion on Tuesday. The total is comprised of $4.85 billion of competitive sales and $10.73 billion of negotiated deals.
