Top quality munis closed stronger on Tuesday as yields on some maturities were lower by as much as two basis points, according to traders.
A bevy of deals priced, including four competitive sales from Empire State Development Corp. that totaled $1.134 billion.
Primary Market
The Empire State Development Corp. on Tuesday sold the personal income tax revenue bonds in separate competitive sales for the New York State Urban Development Corp.
The offering consists of $398.275 million of Series 2015A Group B bonds; $386.275 million of Series 2015A Group A bonds; $237.215 million of Series 2015B taxable bonds; and $112.445 million of Series 2015A Group C bonds. All four sales are rated Aa1 by Moody's Investors Service and triple-A by Standard and Poor's.
The group 2015A Group B bonds were won by Bank of America Merrill Lynch with a true interest cost of 3.34%. The bonds were priced to yield from 2.26% with a 5% coupon in 2026 to 2.92% with a 5% coupon in 2035.
The group 2015A Group A bonds were won by Wells Fargo Securities with a TIC of 1.83%. The bonds were priced to yield from 0.40% with a 5% coupon in 2016 to 2.09% with a 5% coupon in 2025.
The group 2015B taxable bonds were won by JP Morgan with a true interest cost of 1.78%. No other pricing information was immediately available.
The 2015A Group C bonds were won by Jefferies LLC with a TIC of 3.98%. The bonds were priced to yield from 2.93% with a 5% coupon in 2036 to 3.07% with a 5% coupon in 2042. A 2045 term bond was priced to yield 3.10% with a 5% coupon.
The last time the ESDC competitively sold comparable tax-exempt bonds was on Dec. 2, 2014, when JPMorgan won $414.86 million of Series 2014A Group A PIT bonds with a TIC of 1.82%; ESDC last sold comparable taxable bonds on Dec. 2, 2014, when Goldman Sachs won $370.82 million of Series 2014B bonds.
Since 2005, the Empire State Development Corp. has issued about $15.03 billion of debt. The most issuance took place in 2009 and 2013 when the ESDC sold $2.55 billion and $3.28 billion of bonds, respectively. The low years occurred in 2006 and 2012, when it did not come to market at all. During the past 10 years, it has come to market with bonds an average of 4.1 times per year.
Wells Fargo Securities priced New York City Housing Development Corp.'s $197.33 million of Series H&I multi-family housing revenue sustainable neighborhood bonds. This issue is rated Aa2 by Moody's and AA-plus by S&P.
The $136.470 million series H bonds were priced at par in a bullet maturity to yield 2.90% in 2045, with a mandatory tender date of Feb. 1, 2026.
The $60.860 million series I bonds were priced as at par in a bullet maturity to yield 2.90% in 2045, with a mandatory tender date of Feb. 1, 2026.
Additionally, JPMorgan is slated to price the New York City HDC's $176.495 million of Series 2015 G fixed-rate multi-family housing revenue sustainable neighborhood bonds. The bonds were priced at par with a 0.30% coupon and 0.45% coupon in a split 2016 maturity to 3.00% coupon in a split 2028 maturity. Term bonds in 2030, 2035, 2040, 2045 and 2049 were priced at par with a 3.20% coupon, 3.55% coupon, 3.75% coupon, 3.85% coupon and a 3.95% coupon, respectively. The issue is also rated Aa2 by Moody's and AA-plus by S&P.
Las Vegas, Nev., sold $164.425 million of Series 2015C GOLT City Hall bonds, additionally secured by pledged revenues. JP Morgan won the bidding with a TIC of 3.28%. The bonds were priced to yield from 1.40% with a 5% coupon in 2020 to 3.48% with a 4% coupon in 2039. The issue is rated Aa1 by Moody's and AA by S&P.
What was already scheduled to be a busy day, was even busier when two deals that weren't on the calendar came to market from issuers in New York and South Carolina.
BAML priced the Metropolitan Transportation Authority's $318.915 million of revenue refunding bonds, series 2015F for retail investors. The bonds are priced to yield from 0.85% with a 3% coupon in 2017 to 3.17% with a 5% coupon in 2036. No retail orders were taken in the 2027-2029 maturities or the 2031-2035 maturities. The deal is rated A1 by Moody's, AA-minus by S&P, A by Fitch Ratings and AA-plus by Kroll Bond Rating Agency.
BAML priced South Carolina Public Service Authority's $300 million of revenue obligation bonds, series E. The bonds were priced to yield 4.00% with a 5.25% coupon in a bullet maturity in 2055. The deal is rated A1 by Moody's, AA-minus by S&P and A-plus by Fitch.
Secondary Market
The yield on the 10-year benchmark muni general obligation was lower by one basis point to 1.98% from 1.99% on Monday, while the 30-year yield was two basis points lower to 2.90% from 2.92%, according to a final read of Municipal Market Data's triple-A scale.
Treasuries were lower at Tuesday's close as the yield on the two-year Treasury rose to 0.94% from 0.93% on Monday while the 10-year Treasury yield was higher at 2.24% from 2.22% and the 30-year rose to 2.97% from 2.95%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 88.5% from 89.6% on Monday, while the 30-year muni to Treasury ratio stood at 97.5% compared to 98.3%, according to MMD.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $2.747 billion to $6.91 billion on Wednesday. The total is comprised of $1.15 billion competitive sales and $5.76 billion of negotiated deals.
