Top shelf municipal bonds were unchanged at mid-session, traders said, as a new wave of issuance hit the market, led by issuers in California and New York.
Wells Fargo Securities priced for retail investors the Regents of the University of California’s $554.23 million of general revenue bonds consisting of Series AR and AT; these and the taxable Series AS and AU will be priced for institutions on Thursday.
The $421.93 million Series AR bonds were priced to yield from 0.58% with a 3% coupon in 2017 to 3.125% at par in 2038; a 2041 maturity was priced as 5s to yield 2.69% and a 2046 term bond was priced as 5s to yield 2.74%. The $132.3 million of Series AT bonds were priced at par to yield 1.50% in 2046; the bonds have a mandatory tender date in 2046.
The issue is rated Aa2 by Moody’s Investors Service and AA by Standard & Poor’s and Fitch Ratings. The credit has a stable outlook from all three rating agencies.
On Thursday, Wells is set to price the Los Angeles Department of Water and Power’s $550 million of Series 2016A water system revenue bonds. Last week, S&P raised LADWP’s water revenue bond rating to AA-plus from AA. Moody’s and Fitch affirmed their ratings at Aa2 and AA, respectively. All three ratings agencies assign stable outlooks to the credit.
Since 2006, LADWP has sold about $11.73 billion of bonds with the most occurring in 2010 when it sold $2.06 billion of bonds, much of the issuance was subsidized Build America Bonds. The department saw the lowest year of issuance in 2006, when it issued $482 million.
On Wednesday, Goldman Sachs priced the Dormitory of the State of New York’s $392.46 million of Series 2016 revenue bonds for Columbia University.
The $50 million of Subseries 2016A-1 green bonds were priced as 5s to yield 1.72% in 2026. The $130 million of Subseries 2016A-2 bonds were priced as 5s to yield 1.72% in 2026 and 2.66% in half of a split 2046 maturity, there was no retail orders for the other half of the 2046 maturity. The $212.46 million of Series 2016B bonds were priced to yield from 0.60% with 3% and 5% coupons in a split 2017 maturity to 2.10% with as 5% coupon in 2031. The issue is rated triple-A by Moody’s and S&P.
On Thursday, Morgan Stanley will price DASNY’s $149.79 million of Series 2016A revenue bonds for Fordham University.
Citigroup priced the Tarrant County, Texas, Cultural Education Facilities Corp.’s $377.09 million of tax-exempt hospital revenue bonds for Baylor Scott & White Health. The deal is part of a $912 million issue which also consists of $540 million of taxable corporate CUSIP bonds.
The Series 2016A bonds were priced to yield from 0.60% with a 3% coupon in 2016 to 2.81% with a 5% coupon in 2037; a 2042 term was priced as 4s to yield 3.37% and a 2045 term was prices as 5s to yield 3.00%.
The bonds are rated Aa3 by Moody’s and AA-minus by S&P. The issue carries stable outlooks from rating agencies.
In the competitive arena, Elk Grove, Calif., sold $106.8 million of Series 2016 capital facilities project certificates of participation. Mesirow Financial won the issue with a true interest cost of 3.11%. Pricing details were not immediately available. The COPs, which are insured by Build America Mutual, are rated AA by S&P.
Jefferies is set to price the University of Connecticut’s $340.62 million of general obligation bonds for institutions after a two-day retail order period.
The $259.43 million of Series 2016A GOs were priced on Tuesday for retail to yield from 1.09% with 4% and 5% coupons in a split 2019 maturity to 3.21% with a 4% coupon in 2036. No retail orders were taken in the 2029-2032 or 2034-2035 maturities. The 2017 and 2018 maturities were offered as sealed bids. The $81.19 million of Series 2016A refunding GOs were priced for retail as 5s to yield from 1.09% in 2019 to 2.32% in 2027. The 2017 and 2018 maturities were offered as sealed bids.
The issue is rated Aa3 Moody’s Investors Service, AA by Standard & Poor’s and AA-minus by Fitch Ratings.
NYC TFA Plans $750M Competitive Sale
The New York City Transitional Finance Authority will be coming to market on Tuesday, April 12, with a competitive sale of $750 million future tax secured subordinate bonds.
The TFA’s fixed-rate new-money bonds will consist of $500 million of tax-exempt bonds and $250 million of taxables.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $1.04 billion to $9.43 billion on Wednesday. The total is comprised of $2.24 billion of competitive sales and $7.20 billion of negotiated deals.
Secondary Market
The yield on the 10-year benchmark muni general obligation was steady at 1.63% on Tuesday, while the 30-year muni yield was flat at 2.61%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were lower on Wednesday. The yield on the two-year Treasury inched up to 0.73% from 0.72% on Tuesday, while the 10-year Treasury yield gained to 1.75% from 1.73% and the 30-year Treasury bond yield rose to 2.59% from 2.55%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 94.5% compared with 95.7% on Monday, while the 30-year muni to Treasury ratio stood at 102.4% versus 102.3%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 38,383 trades on Tuesday on volume of $11.09 billion.
