Top-shelf municipal bonds ended mixed on Tuesday, according to traders, as the first of the week's larger new deals started to roll in, topped by a sale from the Port Authority of New York and New Jersey.
Secondary Market
The yield on the 10-year benchmark muni general obligation rose one basis point to 1.74% from 1.73% on Monday, while the yield on the 30-year was unchanged from 2.56%, according to the final read of Municipal Market Data's triple-A scale.
U.S. Treasuries turned stronger in late trade. The yield on the two-year fell to 0.83% from 0.85% on Monday, the 10-year Treasury slipped to 1.82% from 1.83% and the yield on the 30-year Treasury bond decreased to 2.57% from 2.58%.
The 10-year muni to Treasury ratio was calculated at 95.6% on Tuesday compared to 94.5% on Monday, while the 30-year muni to Treasury ratio stood at 99.6% versus 99.0%, according to MMD.
Primary Market
Citigroup priced the Port Authority's $587.75 million of consolidated bonds for institutions after holding a one-day retail order period on Monday.
Citi priced the $237.75 million of alternative minimum tax 197th Series bonds to yield from 0.80% with a 4% coupon in 2017 to 1.55% with a 5% coupon in 2021 and from 2.88% with a 5% coupon in 2032 to 3.05% with a 5% coupon in 2036. A 2041 maturity was priced as 5s to yield 3.15%.
The $350 million of non-AMT 198th Series bonds were priced as 5s to yield 2.07% in 2027, 2.20% in 2028 and 2.39% in 2030 and from 2.60% in 2033 to 2.72% in 2036, 2.85% in 2041, and 2.91% in 2046. A 2056 maturity was priced as 5 1/4s to yield 3.06%.
The deal is rated Aa3 by Moody's Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings.
Since 2006, the Port Authority has sold $23.8 billion of securities, with the most issuance occurring in 2012 when it sold $3.69 billion. The authority has sold over $1 billion in every year since 2006 and more than $2 billion five times during that span. Tuesday's sale put the authority over the $1 billion mark for this year.
Goldman Sachs priced the Dormitory Authority of the State of New York's $404.17 million of Series 2016A tax-exempt and Series 2016B taxable revenue bonds for the New School.
The $317.75 million of tax-exempts were priced to yield from 1.49% with a 5% coupon in 2021 to 3.17% with a 5% coupon in 2037. A 2041 maturity was priced as 5s to yield 3.23%, a 2043 maturity was priced as 4s to yield 3.70%, a 2046 maturity was priced as 5s to yield 3.28% and a 2050 maturity was priced as 5s to yield 3.41%.
The $86.42 million of taxables were priced at par to yield from 1.45% in 2017 to 3.27% in 2026 and 4.224 in 2038. The DASNY deal is rated A3 by Moody's and A-minus by S&P.
Morgan Stanley priced the Phoenix Civic Improvement Corp.'s $225.33 million of Series 2016 junior lien wastewater system revenue refunding bonds.
The issue was priced as 5s to yield from 0.73% in 2017 to 2.67% in 2035. The deal is rated Aa2 by Moody's and AA-plus by S&P.
JPMorgan Securities priced the Montana Facility Finance Authority's $141.05 million of Series 2016 hospital revenue bonds for the Benefis Health System Obligated Group.
The issue was priced to yield from 1.12% with a 4% coupon in 2018 to 3.74% with a 3.50% coupon in 2037; a 2041 maturity was priced as 5s to yield 3.38%.
The deal is rated A-minus by S&P and A by Fitch.
In the competitive arena, the Bellevue School District No. 405, Wash., sold $239.17 million of Series 2016 unlimited tax general obligation and refunding bonds. Citi won the bonds with a true interest cost of 2.32%.
The issue was priced to yield from 0.75% with a 5% coupon in 2017 to 3.11% with a 3% coupon in 2035. The deal, backed by the Washington State School District Credit Enhancement Program, is rated Aa1 by Moody's and AA-plus by S&P.
The state of Ohio sold $150 million of Series 2016B infrastructure improvement GO bonds.
BAML won the bonds with a true interest cost of 2.99%. Pricing information was not available. The deal is rated Aa1 by Moody's and AA-plus by S&P and Fitch.
The North Kansas City School District No. 74, Mo., sold $114 million of Series 2016B limited tax GO school improvement bonds under the Missouri Direct Deposit Program.
Raymond James won the bonds with a true interest cost of 2.72%. The issue was priced to yield from 1.25% with a 2% coupon in 2020 to 3.02% with a 3.25% coupon in 2036. The deal is rated Aa1 by Moody's and AA-plus by S&P.
