Prices of top-rated municipal bonds were unchanged at mid-session, traders said, as the first wave of new issue volume hit the market.
In the primary, the New York State Dormitory Authority's $1.33 billion of sales tax revenue bonds were priced for retail investors and several large competitive deals were sold.
Secondary Market
The yield on the 10-year benchmark muni general obligation was steady from 2.29% on Monday, while the yield on the 30-year GO was flat at 3.25%, according to a read of Municipal Market Data's triple-A scale. The scale was also unchanged on Monday.
Treasury prices turned mixed on Tuesday, with the yield on the two-year Treasury note falling to 0.69% from 0.70% on Monday, while the 10-year yield fell to 2.36% from 2.37% and the 30-year yield was unchanged from 3.10%.
The 10-year muni to Treasury ratio was calculated on Monday at 96.6% versus 99.8% on Friday, while the 30-year muni to Treasury ratio stood at 104.7% compared to 106.9%, according to MMD.
Primary Market
Morgan Stanley priced DASNY's $1.33 billion of Series 2015A New York State sales tax revenue bonds for retail investors ahead of the institutional pricing on Wednesday.
The bonds were priced for retail to yield from 0.59% with 2%, 3% and 5% coupons in a triple-split 2017 maturity to 2.55% with a 5% coupon in 2026. The 2016 maturity was offered as a sealed bid. The issue was rated triple-A by Standard & Poor's and AA-plus by Fitch Ratings.
JPMorgan priced the Board of Regents of the University of Texas Systems' $218.24 million of Series 2015B permanent university fund bonds to yield from 0.71% with a 4% coupon in 2017 to 3.65% with a 3.5% coupon in 2035. The 2016 maturity was offered as a sealed bid. The issue was rated triple-A by Moody's Investors Service, S&P and Fitch.
In the competitive arena, the Metropolitan Government of Nashville and Davidson County, Tenn., sold $348 million of Series 2015C general obligation improvement bonds.
Morgan Stanley won the deal with a true interest cost of 3.18%. Pricing details were not available. The bonds were rated Aa2 by Moody's and AA by S&P.
Before this sale, the city last sold comparable bonds competitively on March 4, 2008, when Merrill Lynch won $308 million of Series 2008 GOs with a true interest cost of 4.76%.
Since 1995, Nashville and Davidson County has issued roughly $5.31 billion of general obligation debt. The years of 2010 and 2013 saw the most issuance, with roughly $892 million and $620 million, respectively. The music city and Davidson counties did not come to market with GO issuance in 1998, 2000, 2009 or 2014.
The Miami-Dade County School Board, Fla., sold $200 million of Series 2015 GO school bonds.
Bank of America Merrill Lynch won the deal with a true interest cost of 3.89%. The bonds were priced to yield from 0.19% with a 5% coupon in 2016 to 3.89% with a 4% coupon in 2036; a 2039 term bond was priced at par to yield 4% while a 2045 term was priced at par to yield 4.25%. The issue was rated Aa3 by Moody's and A-plus by S&P.
Before this sale, the district last sold comparable bonds competitively on July 10, 2013, when JPMorgan won $109 million of Series 2013 GO school bonds with a TIC of 4.54%.
The state of New Mexico sold $214.17 million of severance tax bonds in two separate sales.
Barclays Capital won the $139.17 million of Series 2015A severance tax bonds with a TIC of 2.04%. The issue was priced as 5s to yield from 0.25% in 2016 to 2.44% in 2025. The bonds were rated Aa1 by Moody's and AA by S&P.
Barclays also won the $75 million of Series 2015B supplemental severance tax bonds with a TIC of 2.08%. The issue was priced as 5s to yield from 0.30% in 2016 to 2.54% in 2025. The bonds were rated Aa2 by Moody's and AA-minus by S&P.
Before this sale, the state last sold comparable bonds competitively on May 20, 2014, when JPMorgan won $143.77 million of Series 2014A severance tax bonds with a TIC of 2.35%.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 31,620 trades on Monday on volume of $3.907 billion. The most active bond, based on the number of trades, was the Lehigh County General Purpose Authority, Pa., Series 2015A hospital revenue 4 1/4s of 2045, which traded 166 times at an average price of 100.087, an average yield of 4.224%. The bonds were initially priced at 97.352 to yield 4.41%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $215.3 million to $12.80 billion on Tuesday. The total is comprised of $2.70 billion competitive sales and $10.10 billion of negotiated deals.
