Top quality municipal bonds were steady at mid-session, traders said, as more new deals hit the market led by a $1 billion offering from Massachusetts.
Secondary Market
The yield on 10-year benchmark muni general obligation was unchanged from 1.33% on Tuesday, while the 30-year muni yield was flat from 2.02%, according to a midday read of Municipal Market Data's triple-A scale.
U.S. Treasuries were mixed on Wednesday. The yield on the two-year Treasury rose to 0.62% from 0.61% on Tuesday, while the 10-year Treasury yield was flat from 1.46% and the yield on the 30-year Treasury bond decreased to 2.25% from 2.28%.
On Tuesday, the 10-year muni to Treasury ratio was calculated at 91.1% compared to 88.5% on Monday, while the 30-year muni to Treasury ratio stood at 88.8% versus 87.6%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 36,635 trades on Tuesday on volume of $10.21 billion.
Primary Market
The commonwealth of Massachusetts came to market with three separate negotiated deals, totaling over $1 billion.
On Wednesday, Bank of America Merrill Lynch priced the state's $676.79 million of Series 2016B general obligation refunding bonds for institutions following a one-day retail order period. The deal was upsized from $521.91 million.
The bonds were priced for institutions to yield from 1.14% with a 5% coupon in 2022 to 2.18% with a 5% coupon in 2038. The 2017 and 2018 maturities were offered as sealed bids. On Tuesday, the deal was priced for retail investors to yield from 1.08% with a 5% coupon in 2022 to 2.66% with a 3% coupon in 2038.
BAML also priced the state's $250 million of GO consolidated loan of 2016 Series F taxable GO green bonds. The taxables were priced at par to yield 3.277% in 2046.
Barclays Capital priced Massachusetts' $200 million of GO consolidated loan of 2014 Series D multi-modal bonds and Subseries D-1 bonds as a remarketing. The bonds were priced at par to yield 1.05% in 2043 with a mandatory tender in 2020.
All the deals carry ratings of Aa1 by Moody's Investors Service and AA-plus by S&P Global Ratings and Fitch Ratings.
Barclays is also set to price the South Carolina Public Service Authority's $750 million of Series 2016B tax-exempt and Series 2016C tax-exempt refunding and Series 2016D taxable revenue obligations.
The deal is rated A1 by Moody's, AA-minus by S&P and A-plus by Fitch.
Since 2006, Santee Cooper has issued about $10.7 billion of debt, with the largest issuance occurring in 2013 when it sold $1.89 billion of securities. It has issued over $1 billion every year since 2013. The lowest year of issuance was in 2007, when it issued $440.5 million.
JPMorgan Securities received the official award on the state of Texas' $149.54 million of GOs.
The $58.56 million of Series 2016B Subseries 2016B-1 water financial assistance and refunding bonds were priced to yield from 0.57% with a 4% coupon in 2017 to 2.35% with a 4% coupon in 2036; a 2041 maturity was priced as 4s to yield 2.45% and a 2045 maturity was priced as 4s to yield 2.49%. The $30.36 million of Series 2016B Subseries 2016B-2 water financial assistance and refunding variable-rate bonds were priced as 2s to yield 0.95% in 2019. The $28.82 million of Series 2016C Subseries 2016C-1 water financial assistance and refunding bonds, economically distressed areas program, were priced to yield from 0.57% with a 4% coupon in 2017 to 1.41% with a 5% coupon in 2025. The $11.55 million of Series 2016D water financial assistance and refunding bonds, state participation program, were priced to yield from 1.22% with a 5% coupon in 2023 to 1.74% with a 5% coupon in 2035. The $20.26 million of Series 2016B Subseries 2016B-3 taxable water financial assistance and refunding bonds were priced at par to yield from 0.718% in 2017 to 2.645% in 2027.
The deal is rated triple-A by Moody's, S&P and Fitch.
RBC Capital markets priced the Cleburne Independent School District, Johnson County, Texas' $108.98 million of Series 2016 unlimited tax school building bonds.
The issue was priced to yield from 0.72% with a 2% coupon in 2018 to 2.20% with a 5% coupon in 2036; a split 2041 maturity was priced as 5s to yield 2.32% and as 4s to yield 2.55%. The deal is backed by the Permanent School Fund guarantee program, and rated triple-A by Moody's.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $2.23 billion to $7.89 billion on Wednesday. The total is comprised of $2.86 billion of competitive sales and $5.02 billion of negotiated deals.
