Top-quality municipal bonds were steady to weaker at mid-session, according to traders, as more new issue supply was priced on Wednesday.
Secondary Market
The yield on 10-year benchmark muni general obligations was as much as one basis point stronger from 1.65% on Tuesday while the 30-year muni yield was steady from 2.45%, according to a midday read of Municipal Market Data's triple-A scale.
U.S. Treasuries were narrowly mixed on Wednesday. The yield on the two-year Treasury rose to 0.91% from 0.90% on Tuesday, while the 10-year Treasury yield gained to 1.85% from 1.83% and the yield on the 30-year Treasury bond was unchanged from 2.64%.
The 10-year muni to Treasury ratio was calculated at 88.8% on Tuesday compared to 88.7% on Monday, while the 30-year muni to Treasury ratio stood at 92.7% versus 92.5%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,105 trades on Tuesday on volume of $9.67 billion.
Primary Market
JPMorgan Securities priced the San Diego Public Facilities Financing Authority's $566.65 million of Series 2016A and 2016B subordinated water revenue bonds.
The $40.69 million of Series 2016A subordinated water revenue bonds were priced to yield from 0.92% with a 3% coupon in 2019 to 2.61% with a 5% coupon in 2039; a 2041 split maturity was priced as 4s to yield 2.95% and as 5s to yield 2.65%; a 2045 maturity was priced as 5s to yield 2.69%. The 2017-2018 maturities were offered as sealed bids.
The $525.96 million of Series 2016B subordinated water revenue refunding bonds were priced as 5s to yield from 0.92% in 2019 to 2.61% in 2039. The 2016-2018 maturities were offered as sealed bids.
The bonds, which are payable solely from subordinated installment payments secured by net system revenues of the water utility fund, are rated Aa3 by Moody's Investors Service and AA-minus by Fitch Ratings.
Bank of America Merrill Lynch priced the Los Angeles Department of Water and Power's $265.17 million of Series 2016B water system revenue bonds for retail investors.
The issue was priced as 5s to yield from 1.09% in 2021 to 2.45% in 2038; 2.51% in 2042 and 2.55% in 2046. The deal is rated Aa2 by Moody's, AA-plus by S&P Global Ratings and AA by Fitch.
BAML priced the Washington Metropolitan Area Transit Authority, D.C.'s $220 million of Series 2016A gross revenue transit bonds. The issue was priced to yield from 0.83% with a 4% coupon in 2017 to 1.11% with a 4% coupon in 2019. The deal is rated A2 by Moody's and AA-minus by S&P.
Barclays Capital is set to price the city of Chicago's $348.32 million of Series 2016A AMT and Series 2016B Non-AMT second lien revenue and revenue refunding bonds for Midway Airport. The bonds are rated A by S&P, Fitch and Kroll Bond Rating Agency.
In the competitive sector on Wednesday, Fort Worth, Texas, sold $258.53 million of bonds in three separate offerings.
Morgan Stanley won the $165.11 million of Series 2016 general purpose refunding and improvement bonds with a true interest cost of 2.38%. Pricing information was not available. The bonds are rated Aa2 by Moody's and AA-plus by S&P and Fitch.
Wells Fargo Securities won the $75.27 million of Series 2016 water and sewer system revenue refunding and improvement bonds with a TIC of 2.81%; the bonds are rated Aa1 by Moody's, AA-plus by S&P and AA by Fitch. Frost Bank won the $17.53 million of Series 2016 drainage utility system revenue refunding bonds with a TIC of 2.48%; the bonds are rated AA-plus by S&P and Fitch.
The Metropolitan Council of the Minneapolis-St. Paul Area in Minnesota competitively sold $164 million of bonds in three separate offerings.
Citigroup won the $123.13 million of Series 2016C GO wastewater and refunding bonds with a TIC of 2.28%. The issue was priced to yield from 0.54% with a 5% coupon in 2017 to 2.80% with a 3.50% coupon in 2036.
Barclays Capital won the $36.17 million of Series 2016A GO transit and refunding bonds with a TIC of 1.31% and Morgan Stanley won the $4.7 million of Series 2016B GO park bonds with a TIC of 0.82%. The bonds are rated triple-A by Moody's and S&P.
The Santa Clara County Financing Authority, Calif., competitively sold $160.85 million of Series 2016Q refunding lease revenue bonds for multiple facilities projects.
Morgan Stanley won the bonds with a TIC of 2.84%. Pricing information was not available. The deal is rated AA-plus by S&P and AA by Fitch.
Since 2006, the authority has issued about $1.2 billion of bonds with the largest issuance occurring in 2008 when it sold $382.4 million of debt. The authority did not come to market in 2011 or 2013.
Citi won the Los Angeles County Metropolitan Transportation Authority's $91.69 million of Series 2016A Proposition C sales tax revenue refunding bonds with a TIC of 1.93%.
The issue was priced to yield from 0.58% with a 5% coupon in 2017 to 2.24% with a 4% coupon in 2030. The bonds are rated Aa2 by Moody's and AA-plus by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $2.08 billion to $12.92 billion on Wednesday. The total is comprised of $7.47 billion of competitive sales and $5.46 billion of negotiated deals.
