Top quality municipal bonds finished stronger on Wednesday, according to traders, as the $1 billion University of California Medical Center deal came to market.
Secondary Market
The yield on the 10-year benchmark muni general obligation fell three basis points to 1.42% from 1.45% on Tuesday, while the yield on the 30-year muni dropped three basis points to 2.15% from 2.18%, according to the final read of Municipal Market Data's triple-A scale.
Treasuries were stronger on Wednesday. The yield on the two-year Treasury declined to 0.69% from 0.71% on Tuesday, the 10-year Treasury yield dropped to 1.51% from 1.56% and the yield on the 30-year Treasury bond decreased to 2.23% from 2.27%.
The 10-year muni to Treasury ratio was calculated at 94.0% on Wednesday compared to 93.9% on Tuesday, while the 30-year muni to Treasury ratio stood at 96.4% versus 96.6%, according to MMD.
Primary Market
Barclays Capital Markets priced the Regents of the U. of Cal Med Center's $1.05 billion of tax-exempt and taxable bonds on Wednesday.
The $873 million of Series 2016L tax-exempt pooled revenue bonds were priced and repriced to yield from 0.41% with a 1.75% coupon in 2017 to 2.64% with a 4% coupon in 2038. A 2041 maturity was priced as 5s to yield 2.38%, a 2042 maturity was priced as 3s to yield approximately 3.042%, a 2044 maturity was priced as 4s to yield 2.71% and a 2047 maturity was priced as 5s to yield 2.43%.
The $173.36 million of Series 2016M taxables were priced at par to yield from 0.74% in 2017 to 2.959% in 2031 and 3.29% in 2031 and 3.49% in 2047.
The deal is rated Aa3 by Moody's Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings. The credit carries stable outlooks from all three rating agencies.
Since 2006, the issuer has sold $22.57 billion of securities, with its highest volume in 2013 when it sold $4.7 billion. The regents have issued less than $1 billion twice since 2006 – in 2008 and 2014.
Citigroup priced and repriced the Utility Debt Securitization of New York's $469.46 million of Series 2016B restructuring bonds.
The issue was repriced as 5s to yield 0.55% and 0.59% in a split 2019 maturity and as 5s to yield to 0.68% and 0.72% in a split 2020 maturity and to yield from 0.93% and 0.99% with a 5% coupon in a split 2022 maturity to 1.27% and 1.32% with 5% coupons in a split 2025 maturity, as 5s to yield 1.52% and 1.56% in a split 2027 maturity, as 5s to yield 1.83% in 2030, and from 1.96% with a 5% coupon in 2032 to 2.22% with a 4% coupon and 2.04% with a 5% coupon in a split 2035 maturity.
The 2019 to 2027 maturities were priced to the maturity date while the 2030 to 2035 maturities were priced to the June 15, 2016 call date.
The deal is rated triple-A by Moody's, S&P and Fitch. The credit carries stable outlooks from all three agencies.
Goldman Sachs priced the Missouri Health and Educational Facilities Authority's $272.75 million of Series 2016B taxable educational facilities revenue bonds for the Washington University.
The issue was priced as a 2051 bullet maturity at par to yield 3.086%, or about 85 basis points over the comparable Treasury security. The deal is rated triple-A by Moody's and S&P.
Citi priced Port St. Lucie, Fla.'s $207.91 million of Series 2016 utility system refunding bonds.
The issue was priced to yield from 0.60% with a 3% coupon in 2017 to 2.84% with a 4% coupon in 2036. The deal is rated A-plus by S&P and Fitch.
JPMorgan Securities priced Jacksonville, Fla.'s $149.41 million of special revenue refunding bonds.
The issue was priced to yield from 0.58% with a 4% coupon in 2017 to 2.74% with a 4% coupon in 2034; a 2040 maturity was priced as 3s to yield 3.05%. The deal is rated Aa3 by Moody's and AA-minus by S&P and Fitch.
In the competitive arena, the Louisville/Jefferson County Metropolitan Sewer District sold two separate sales totaling $102.03 million.
Morgan Stanley won the $71.16 million of Series 2016C sewer and drainage system revenue refunding bonds with a true interest cost of 1.11%. Hutchinson Shockey won the $30.88 million of Series 2016B sewer and drainage system revenue refunding bonds with a TIC of 2.09%.
Both deals are rated Aa3 by Moody's and AA by S&P.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 34,236 trades on Tuesday on volume of $11.41 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $1.933 billion to $9.83 billion on Wednesday. The total is comprised of $3.09 billion of competitive sales and $6.74 billion of negotiated deals.
