Top rated municipal bonds were stronger at mid-session, traders said, as more supply came to market led by issuers in Chicago, California and Oregon.
PNC Capital Markets priced Chicago's $505 million sale of second lien water revenue bonds.
The $60.75 million of Series 2016A-1 tax-exempts were priced to yield from 2.55% with a 5% coupon in 2023 to 3.25% with a 5% coupon in 2031.
The $334.58 million of Series 2004 second lien water revenue refunding bonds were priced as a remarketing as 5s to yield from 1.59% in 2018 to 3.04% in 2027. A 2017 maturity was offered as a sealed bid.
The $100 million of Series 2000 second lien water revenue refunding bonds were priced as a remarketing as 5s to yield from 3.10% in 2028 to 3.19% in 2030.
The issue is rated A by Standard & Poor's Global Ratings and AA by Fitch Ratings and Kroll Bond Rating Agency.
Since 2006, Chicago has issued about $24 billion of debt, with the largest issuance occurring in 2015 when the city sold $4.24 billion of securities. The Windy City offered the least amount of bonds in 2009 when it sold $777.9 million.
Bank of America Merrill Lynch priced the Alameda Corridor Transportation Authority, Calif.'s $601 million of Series 2016 A&B tax-exempt subordinate and second subordinate lien revenue refunding bonds.
The $30.7 million of Series 2016A subordinate lien revenue refunding bonds were priced to yield from 1.44% with a 5% coupon in 2021 to 2.11% with a 5% coupon in 2025. The $570 million of Series 2016B second subordinate lien revenue refunding bonds were priced to yield from 2.93% with a 5% coupon and 3.23% with a 3% coupon in a split 2034 maturity to 3.10% with a 5% coupon, 3.25% with a 4% coupon and 2.95% with a 5% coupon in a triple split 2037 maturity.
The Series A bonds are rated Baa2 by Moody's Investors Service and BBB-plus by S&P and Fitch. The Series B bonds are rated Baa2 by Moody's and BBB by S&P and Fitch -- except for half of the 2034 split maturity, both parts of the 2035 split maturity, two parts of the 2036 triple split maturity and two parts of the 2037 triple split maturity, which are insured by Assured Guaranty and rated A2 by Moody's and AA by S&P.
Morgan Stanley priced the state of Oregon's $336 million of Series 2016 D, E, F, G and H Article XI-M seismic projects and Article XI-Q state projects general obligation bonds on Wednesday.
The $66.9 million of Series 2016D Article XI-Q bonds were priced to yield from 0.68% with a 2% coupon in 2018 to 2.36% with a 5% coupon in 2036; a 2041 maturity was priced as 5s to yield 2.52%. A 2017 maturity was offered as a sealed bid.
The $181.19 million of Series 2016F Article XI-Q bonds were priced to yield from 0.80% with a 2% coupon to 2.36% with a 5% coupon in 2036; a 2039 maturity was priced as 5s to yield 2.46%.
The $46.8 million of Series 2016G Article XI-Q bonds were priced to yield from 0.73% with a 3% coupon in 2018 to 2.26% with a 5% coupon in 2034.
The $41.16 million of Series 2016H Article XI-M bonds were priced to yield from 0.69% with a 3% coupon in 2018 to 2.36% with a 5% coupon in 2036. A 2017 maturity was offered as a sealed bid.
The bonds are rated Aa1 by Moody's and AA-plus by S&P and Fitch.
Since 2006, the state of Oregon has sold about $4.27 billion of bonds including the current issue, with the largest issuance occurring in 2013 when it offered $719 million of debt. The Beaver State sold the least amount of debt in 2009 when is issued $107 million.
Loop Capital Markets is set to price the Los Angeles International Airport's $293 million of Series 2016A subordinate revenue bonds on Wednesday. The deal, which is subject to the alternative minimum tax, is rated A1 by Moody's and AA-minus by S&P and Fitch.
BAML is set to price the New Jersey Higher Education Student Assistance Authority's $190 million of Series 2016 A1 and 1B senior and subordinate student loan revenue bonds on Wednesday. The deal is rated Aa2 by Moody's and AA by S&P.
Barclays Capital is expected to price the Texas Public Finance Authority's $188.66 million of general obligation refunding bonds on Wednesday. The deal is rated triple-A by Moody's, S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $1.83 billion to $12.55 billion on Wednesday. The total is comprised of $5.63 billion of competitive sales and $6.92 billion of negotiated deals.
Secondary Market
The yield on the 10-year benchmark muni general obligation was as much as one basis point weaker from 1.56% on Tuesday, while the 30-year muni yield was as much as one basis point weaker from 2.48%, according to a midday read of Municipal Market Data's triple-A scale.
U.S. Treasuries were narrowly mixed on Wednesday. The yield on the two-year Treasury was unchanged from 0.72% on Tuesday, while the 10-year Treasury yield fell to 1.75% from 1.76% and the yield on the 30-year Treasury bond decreased to 2.60% from 2.61%.
The 10-year muni to Treasury ratio was calculated at 88.8% on Tuesday compared with 89.4% on Monday, while the 30-year muni to Treasury ratio stood at 95.0% versus 95.1%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,886 trades on Tuesday on volume of $10.57 billion.
Requests for New Muni CUSIPs Rise in April
Demand for new municipal CUSIP identifiers rose 1% in March, the third straight monthly rise, CUSIP Global Services said in a report released on Wednesday.
A total of 1,443 new municipal bond identifier requests were made in April, up from 1,430 in March. On a year-over-year basis, however, April municipal bond identifier requests were down by 7%.
Long-term muni note CUSIP orders inched up to 26 in April, compared to 25 requests in March. Short-term note muni CUSIP volume fell to 83 in April from 91 in March.
The report tracks requests by issuers for bond identifiers as an early indicator of new volume and suggests a resurgence of municipal issuance in the next several weeks.
"While we are still off some of the highs reached in the first part of last year, the recent trend in CUSIP request volume has been indicative of a healthy market for new debt issuance," Gerard Faulkner, Director of Operations for CUSIP Global Services, said in a press release.
Regionally, municipal bond issuers in Texas requested the highest volume of new identifiers in April, accounting for 189 CUSIP requests. In the first four months of this year, Texas issuers accounted for the most CUSIP requests at 611, or 11%, of total volume. New York State was second with 392 municipal CUSIP orders.
"As long as the interest rate environment continues to favor debt issuance, we expect to see this trend toward steady increases month-to-month volume continuing," Richard Peterson, Senior Director of S&P Global Market Intelligence, said in the release.
