The primary market saw noteworthy deals from issuers in North Carolina, Texas, Wisconsin and Maryland on Wednesday.
Munis were mostly steady around midday, although on the long end there was some strength, as some maturities were up to three basis points lower, according to traders.
Primary Market
The largest competitive sale of the week came from North Carolina on Wednesday, as the Old North State sold $330 million of GO refunding bonds. Morgan Stanley won the bid with a true interest cost of 1.95%. The bonds were priced to yield from 0.41% with a 3% coupon in 2017 to 2.61% with a 3% coupon in 2030. The deal is rated triple-A by Moody's Investors Service, Standard and Poor's and Fitch Ratings.
BOSC, Inc., priced Plano Independent School District, Texas' $303.815 million of unlimited tax refunding bonds, series 2016A and series 2016B. The bonds were priced to yield from 0.66% with a 5% coupon in 2018 to 2.38% with a 5% coupon in 2030. The 2017 maturity was offered as a sealed bid. The deal is backed by the Permanent School Fund Guarantee Program and is rated triple-A by Moody's, S&P and Fitch.
Wisconsin competitively sold $297.69 million of general obligation bonds, with Bank of America Merrill Lynch winning the bid with a TIC of 3.24%. The bonds were priced to yield from 1.63% with a 5% coupon in 2024 to 2.64% with a 5% coupon in 2036. The deal is rated Aa2 by Moody's and AA by S&P and Fitch.
Since 2006, the state of Wisconsin issued bonds an average of 8 times a year, selling about $16 billion, with the largest issuances in 2008 and 2009 when it offered $1.9 billion and $2.4 billion, respectively, and the lows in 2006 and 2007, when it issued $821 million and $1.1 billion.
Goldman, Sachs received the official award on the Lower Alabama Gas District's $599.35 million of gas project revenue bonds. The bonds were priced to yield from 2.97% with a 5% coupon in 2027 to 3.25% with a 5% coupon in 2029. Term bonds in 2031, 2034 and 2046 were priced to yield 3.55%, 3.75% and 4.14%, respectively, all with 5% coupons. The deal is rated A3 by Moody's and A-minus by Fitch.
The state of Alabama also sold two competitive issues totaling $125.655 million. The general obligation bonds are rated Aa1 by Moody's, AA by S&P and AA-plus by Fitch. The $99.135 million of Series 2016-A bonds were won by BAML with a TIC of 2.69%. The bonds were priced to yield 0.57% with a 5% coupon in 2017 and from 1.05% with a 5% coupon in 2021 to 3.14% with a 3% coupon in 2036. The $26.52 million of series 2016-B bonds were won by Wells Fargo with a TIC of 0.89%.
Secondary Market
The yield on the 10-year benchmark muni general obligation was steady at 1.71% on Tuesday, while the 30-year muni yield was as many as three basis points lower from 2.78%, according to a read of Municipal Market Data's triple-A scale.
Treasuries were stronger around midday on Wednesday. The yield on the two-year Treasury fell to 0.72% from 0.74% on Tuesday, while the 10-year Treasury yield dipped to 1.70% from 1.74% and the 30-year Treasury bond yield decreased to 2.55% from 2.60%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 98.1% compared to 95.3% on Monday, while the 30-year muni to Treasury ratio stood at 107.1% versus 106.2%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,523 trades on Tuesday on volume of $9.974 billion.
