The primary market priced noteworthy deals from issuers in North Carolina, Texas and Wisconsin on Wednesday.
Munis closed the day mostly unchanged, although on the long end there was some strength, as seven maturities were one basis point lower, according to traders.
Primary Market
The largest competitive sale of the week came from North Carolina, 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. The lows came in 2006 and 2007, when Wisconsin 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%.
The last of the week's major deals are on the calendar for Thursday. Citi is set to price the University Of Arizona Board Of Regents System's $179 million of revenue bonds. The deal is expected to mature serially from 2019 through 2039 and is rated A2 by Moody's and AA-minus by S&P.
The University of Arizona plans to take advantage of continuing low interest rates with an advanced refunding of bonds issued from 2007 to 2009.
RBC Capital Markets managing director Kurt Freund, UA's financial advisor, said the university estimates net present value savings will be in the range of $17 million to $19 million, or 9.2% to 10.6% of the par amount of bonds expected to be refinanced.
"The University expects the sale will be well received given current market conditions and the fact that the University has not come to market recently and there has been little supply of high credit quality Arizona paper," Freund said. "Expectations are that demand will be strong from both professional retail buyers as well as institutional investors."
BOSC Inc., is scheduled to price Allen Independent School District, Texas' $144.95 million of unlimited tax refunding bonds. The deal is rated AA by S&P.
In the competitive sector, the New York City Municipal Water Finance Authority will be selling $191.565 million of water and sewer system revenue bonds. The deal is rated triple-A by S&P and AA-plus by Fitch.
Secondary Market
On Wednesday, the yield on the 10-year benchmark muni general obligation was unchanged at 1.71% from Tuesday, while the 30-year muni yield fell to 2.77% from 2.78%, according to a final read of Municipal Market Data's triple-A scale.
Treasuries were mixed. The yield on the two-year Treasury rose to 0.75% from 0.74%, while the 10-year Treasury yield was flat from 1.74% and the 30-year Treasury bond yield decreased to 2.58% from 2.60%.
The 10-year muni to Treasury ratio was calculated on Wednesday at 98.4% compared to 98.1% on Tuesday, while the 30-year muni to Treasury ratio stood at 106.7% versus 107.1%, according to MMD.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $1.42 million to $5.71 billion on Thursday. The total is comprised of $2.08 billion of competitive sales and $3.63 billion of negotiated deals.
