Top rated municipal bonds were stronger at mid-session, according to traders, with yields on some maturities falling by as much as four basis points.
The yield on the 10-year benchmark muni general obligation was two to four basis points weaker from 1.62% on Monday while the 30-year muni yield was two to four basis points weaker from 2.58%, according to a midday read of Municipal Market Data's triple-A scale.
U.S. Treasuries were stronger on Tuesday as stock prices fell on worries about global economic growth. The yield on the two-year Treasury dropped to 0.74% from 0.79% on Friday, while the 10-year Treasury yield declined to 1.79% from 1.86% and the yield on the 30-year Treasury bond decreased to 2.64% from 2.72%.
The 10-year muni to Treasury ratio was calculated at 86.9% on Monday compared with 88.5% on Friday, while the 30-year muni to Treasury ratio stood at 95.0% versus 96.6%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 35,008 trades on Monday on volume of $9.98 billion.
Primary Market
RBC Capital Markets priced the Dormitory Authority of the State of New York's $219.285 million of Series 2016 A, B, C and D school district revenue bond financing program revenue bonds for institutions after holding a one-day retail order period.
The $193.44 million of Series A bonds were priced to yield from 0.75% with a 2% coupon in 2017 to 3.14% with a 3.125% coupon in 2036. A term bond in 2039 was priced to yield 3.26% with a 3.25% coupon. The 2016 maturity was offered as a sealed bid. The 2034-2036 and 2039 maturities are insured by Build America Mutual.
The $14.77 million of Series B bonds were priced to yield from 0.54% with a 2% coupon in 2016 to 1.67% with a 5% coupon in 2024. The $7.47 million of Series C bonds were priced to yield from 0.54% with a 2% coupon in 2016 to 1.67% with a 5% coupon in 2024. The $3.61 million of Series D bonds were priced to yield from 0.54% with a 2% coupon in 2016 to 1.72% with a 5% coupon in 2024. The entire Series D bonds are insured by Build America Mutual.
The Series A bonds are rated A-plus by Standard & Poor's and AA-minus by Fitch Ratings except for the 2034-2036 and 2039 maturities which are rated AA by S&P. The Series B bonds are rated Aa3 by Moody's Investors Service and AA-minus by Fitch; the Series C bonds are rated AA-minus by S&P and Fitch; and the Series D bonds are rated AA by S&P and AA-minus by Fitch.
In the Pacific Northwest, Seattle, Wash., competitively sold three separate issues totaling $151.33 million.
The largest sale, $107.54 million of Series 2016A limited tax general obligation improvement and refunding bonds were won by Bank of America Merrill Lynch with a true interest cost of 2.18%. The bonds were priced to yield from 0.55% with a 5% coupon in 2017 to 2.69% with a 4% coupon in 2036.
BAML also won the $37.75 million of Series 2016 unlimited tax GO improvement bonds with a TIC of 3.08% while Janney won the $6.04 million of Series 2016B taxable limited tax GO improvement bonds with a TIC of 1.76%.
The Series 2016A and Series 2016B bonds are rated Aa1 by Moody's and triple-A by S&P and Fitch and the Series 2016 bonds are rated triple-A by Moody's, S&P and Fitch.
The Dallas Community College District, Texas, competitively sold $123.50 million of Series 2016 limited tax GO refunding bonds. JPMorgan Securities won the bonds with a TIC of 1.61%. The bonds were priced to yield from 0.53% with a 3% coupon in 2017 to 2.19% with a 3% coupon in 2028. The deal is rated triple-A by Moody's, S&P and Fitch.
The Missouri Board of Public Buildings competitively sold $100 million of Series 2016A special obligation bonds on Tuesday. Pricing information was not immediately available. BAML won the bonds with a TIC of 2.29%. The deal is rated Aa1 by Moody's and AA-plus by S&P and Fitch.
On Wednesday, the biggest deal of the week is coming from the North Texas Tollway Authority. JPMorgan is expected to price the NTTA's $947 million of Series 2016A system first tier revenue refunding bonds. The deal is rated A1 by Moody's and A by S&P.
Since 2006, the NTTA has sold more nearly $14 billion of debt, with over $1 billion of bonds sold in 2008, 2009, 2011 and 2015. The smallest issuance year was 2013, when the authority did not sell any bonds.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.81 billion to $14.62 billion on Tuesday. The total is comprised of $6.13 billion of competitive sales and $8.49 billion of negotiated deals.
