The municipal bond market primary continued to steal the spotlight as the Port Authority of New York & New Jersey offering was priced for institutions while the New York City Transitional Finance Authority held a second day of retail orders for its bonds.
Prices of top-rated munis were mixed at mid-session, according to bond traders.
Secondary Market
The yield on the 10-year benchmark muni general obligation was down as much as one basis point from 1.95% on Tuesday, while the yield on the 30-year GO was unchanged at 2.82%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were higher on Wednesday with the yield on the two-year Treasury note dropping to 0.50% from 0.51% on Tuesday as the 10-year yield slipped to 1.88% from 1.89% and the 30-year yield decreased to 2.53% from 2.54%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 102.5% versus 101.8% on Monday, while the 30-year muni to Treasury ratio stood at 110.8% compared to 110.0%.
Primary Market
In the negotiated sector, Bank of America Merrill Lynch priced the Port Authority of New York & New Jersey's $775 million of consolidated bonds for institutions after a one-day retail order period.
The $125 million PANY/NJ's 188th Series alternative minimum tax consolidated bonds were priced to yield from 0.56% with a 5% coupon in 2017 to 3.35% with a 5% coupon in 2035. The 2015 and 2016 maturities were offered as sealed bids.
The PANY/NJ's $490 million of 189th Series tax-exempt consolidated bonds were priced to yield from 0.51% with a 4% coupon in 2017 to 3.05% with a 5% coupon in 2035. A term bond in 2040 was priced as 5s to yield 3.15% and a 2045 term was priced as 5s to yield 3.20%. The 2016 maturity was offered as a sealed bid.
The PANY/NJ's $160 million of 190th Series tax-exempt consolidated bonds were priced as 5s to yield from 1.77% in 2026 to 2.44% in 2038.
On Tuesday, BAML priced the $125 million 188th Series bonds for retail to yield from 0.56% with a 5% coupon in 2017 to 2.62% with a 5% coupon in 2025; a 2035 maturity was priced as 5s to yield 3.37%. No retail orders were taken in the 2026-2034 maturities; the 2015 and 2016 maturities were offered as sealed bids.
The $550 million 189th Series bonds were priced for retail to yield from 0.51% with a 4% coupon in 2017 to 2.47% with a 5% coupon in 2026; and as 3s to yield 3.10% in 2029, as 3 1/4s to yield 3.42% in 2033 and as 5s to yield 3.22% in a 2045 term. No retail orders were taken for the 2027-2028, 2030-2032, 2034-2035 and 2040 maturities. The 2016 maturity was offered as a sealed bid.
The $100 million 190th Series bonds were priced for retail as 5s to yield 1.79% in 2026 and 1.90% in 2027. No retail orders were taken in the 2028 through 2035 maturities.
The issue is rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings.
Loop Capital Markets on Wednesday held the second of a two-day retail order period on the NYC TFA's $650 million of Fiscal 2015 Subseries E-1 future tax secured subordinate bonds. The institutional pricing is slated for Thursday.
On day two of the retail pricing, the bonds were priced to yield 0.87% with 1%, 3% and 5% coupons in a 2018 triple split maturity to 3.00% with a 5% coupon in 2033. A 2042 split maturity was priced as 3 5/8s to yield 3.70% and as 5s to yield 3.19%. No retail orders were taken in 2031, 2034, 2035 and 2041. A 2017 maturity was offered as a sealed bid.
On day one, the bonds were priced for retail to yield 0.87% with 1%, 3% and 5% coupons in a 2018 triple split maturity to 3.02% with a 5% coupon in 2033. A 2042 split maturity was priced as 3 5/8s to yield 3.70% and as 5s to yield 3.21%. No retail orders were taken in 2030, 2031, 2034, 2035 and 2041. A 2017 maturity was offered as a sealed bid.
The bonds are rated Aa1 by Moody's and triple-A by S&P and Fitch.
The TFA will competitively sell $200 million of Fiscal 2015 Series E Subseries E-2 future tax secured taxable subordinate bonds on Thursday. The deal may be structured as serials ranging from 2020 to 2029. The taxables are rated Aa1 by Moody's and triple-A by S&P and Fitch.
Elsewhere, Morgan Stanley priced the New Jersey Educational Facilities Authority's $157.94 million of 2015 Series A revenue refunding bonds for Princeton University. The bonds were priced to yield from 0.60% with a 5% coupon in 2017 to 3.02% with a 4% coupon in 2035; a 2016 maturity was offered as a sealed bid. The bonds were earlier priced for retail to yield from 0.57% with a 5% coupon in 2017 to 3.02% with a 4% coupon in 2035; a 2016 maturity was offered as a sealed bid.
Proceeds of the sale will be used to finance the current refunding of the University's 2005 Series B revenue bonds. The issue is rated triple-A by Moody's and S&P.
Since 1995, the New Jersey Educational Facilities Authority has sold over $2.77 billion of debt with Princeton University as the beneficiary. The NJEFA saw high years of issuance in 2007 and 2008 when it sold $393 million and $459 million, respectively. The Authority did not issue any debt for Princeton in 2000, 2009, 2012 or 2013.
RBC Capital Markets priced the Michigan Finance Authority's $181.21 million of hospital revenue and refunding bonds for the Sparrow Obligated Group. The bonds were priced to yield from 0.30% with a 3% coupon in 2015 to 4.04% with a 4% coupon in 2036; a 2040 term was priced as 4s to yield 4.08% and a 2045 term was priced as 5s to yield 3.72%. The issue is rated A1 by Moody's and A-plus by S&P.
Morgan Stanley priced the Texas Public Finance Authority's $135.11 million deal consisting of the state of Texas' $129.85 million Series 2015A GO refunding bonds and $5.26 million Series 2015B GO park development refunding bonds. The Series 2015A bonds were priced to yield from 0.77% with 4% and 5% coupons in a 2017 split maturity to 2.51% with a 5% coupon in 2028. The Series 2015B bonds were priced to yield 0.13% with a 2% coupon in 2015 to 1.24% with a 5% coupon in 2019. The issue is rated triple-A by Moody's, S&P and Fitch.
In the competitive arena on Wednesday, the state of Virginia sold $214.88 million of Series 2015B general obligation refunding bonds. Citi won the deal with a true interest cost of 2.2654%. The issue was priced to yield from 0.80% with a 4% coupon in 2018 to 3.22% with a 3% coupon in 2037. The deal is rated triple-A by Moody's, S&P and Fitch.
Virginia last sold bonds competitively on March 27, 2014, when JPMorgan won $133.81 million of Series 2014A GOs with a true interest cost of 3.0823%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $1.834 billion to $11.426 billion on Wednesday. The total is comprised of $3.399 billion competitive sales and $8.027 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 43,191 trades on Tuesday on volume of $11.186 billion. Most active, based on the number of trades, was the Chicago Series 2012B taxable GO project and refunding 5.432s of 2042, which traded 325 times at an average price of 86.428 with an average yield of 6.508%. The bonds were initially priced at par to yield 5.432%.
