Top-rated municipal bonds were steady to weaker at mid-session, according to traders, as a second wave of new issuance swept over the market on Wednesday.
Secondary Market
The yield on 10-year benchmark muni general obligation was as much as one basis point stronger from 1.49% on Tuesday, while the 30-year muni yield was steady from 2.19%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were little changed. The yield on the two-year Treasury was steady from 0.75% on Tuesday, while the 10-year Treasury yield slipped to 0.69% from 1.70% and the yield on the 30-year Treasury bond increased to 2.51% from 2.50%.
On Tuesday, the 10-year muni to Treasury ratio was calculated at 87.8% compared to 88.0% on Monday, while the 30-year muni to Treasury ratio stood at 87.7% versus 88.3%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,339 trades on Tuesday on volume of $10.05 billion.
Primary Market
Morgan Stanley priced the New York Metropolitan Transportation Authority's $595.86 million of Series 2016B transportation revenue refunding bonds for institutions on Wednesday after a one-day retail order period. The issue was upsized from the retail order period's original amount of $543.66 million.
The bonds were priced for institutions to yield from 0.95% with 3.5% and 5% coupons in a split 2019 maturity to 2.45% with a 5% coupon in 2037. The 2018 maturity was offered as a sealed bid.
On Tuesday, the issue was priced for retail to yield from 0.96% with 3.5% and 5% coupons in a split 2019 maturity to 2.46% with a 5% coupon in 2037.
The deal is rated A1 by Moody's Investors Service, AA-minus by S&P Global Ratings, A by Fitch Ratings and AA-plus by Kroll Bond Rating Agency.
Wells Fargo Securities priced the University of California Regents' $513.99 million of taxable and tax-exempt limited project revenue bonds.
The $435.94 million of Series K tax-exempt bonds were priced to yield from 0.70% with a 4% coupon in 2018 to 2.57% with a 4% coupon in 2037. A term bond in 2046 was priced as 4s to yield 2.66% and a term bond in 2051 was priced as 5s to yield 2.49%. The 2017 maturity was offered as a sealed bid.
Pricing details on the taxable part of the deal were not immediately available. The bonds are rated Aa3 by Moody's and AA-minus by S&P and Fitch
RBC Capital Markets priced the Pennsylvania Housing Finance Agency's $214.27 million of Series 2016-120 single-family non-AMT mortgage revenue bonds.
The issue was priced at par to yield from 1.30% in 2020 to 2.35% and 2.40% in a split 2027 maturity; the 2031 maturity was priced at par to yield 2.80%, the 2036 maturity was priced at par to yield 3.10%, the 2040 maturity was priced at par to yield 3.20% and the 2046 PAC maturity was priced as 3 1/2s to yield approximately 1.82%. The deal is rated Aa2 by Moody's and AA-plus by S&P.
In the competitive arena, the state of Alaska sold $128.3 million of Series 2016B unlimited tax general obligation bonds.
JPMorgan Securities won the deal with a true interest cost of 2.76%. Pricing information was not immediately available. The deal is rated Aa1 by Moody's and AA-plus by S&P and Fitch.
Since 2006, Alaska has issued about $1.9 billion of debt, with the largest issuance occurring in 2006 when it sold $412.7 million of securities. In 2016, the Last Frontier State has already issued more than $400 million of bonds including this sale, making this year the state's biggest issuance year since 2006.
Citigroup is expected to price the Imperial Irrigation District, Calif.'s $223 million of taxable and tax-exempt electric system refunding revenue bonds. The deal is rated A by S&P.
Raymond James is set to price the Arlington Independent School District, Texas' $184.49 million of unlimited tax school building bonds and tax refunding bonds and taxable bonds. The deal is backed by the Permanent School Fund guarantee program and rated triple-A by Moody's and S&P.
Jefferies is ready to price the Ohio Water Development Authority's $150 million of Series 2016B water development revenue bonds. The deal is expected to be rated triple-A by Moody's and S&P.
Citi is expected to price the Orlando Utilities Commission's $144 million of utility system revenue refunding bonds subject to the alternative minimum tax. The deal is rated Aa2 by Moody's and AA by S&P and Fitch.
Bank of America Merrill Lynch is set to price the state of Michigan's $128 million of GO school loan refunding Series 2016A taxable and Series 2016B tax-exempt bonds. The deal is rated Aa1 by Moody's, AA-minus by S&P and AA by Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $1.55 billion to $11.50 billion on Wednesday. The total is comprised of $3.53 billion of competitive sales and $7.96 billion of negotiated deals.
