Top-rated municipal bonds finished stronger on Tuesday, traders said, as the first of the week's new issues started to come to market.
The biggest deal of the day was reportedly postponed. Wells Fargo Securities had been slated to price the California State Public Works Board's $527.5 million of Series 2016C&D lease revenue refunding bonds on Tuesday, but market sources said the deal had been delayed indefinitely.
No reason for the delay was made public and the California State Treasurer office's declined to comment at this time.
Ramirez & Co. priced the Los Angeles Community College District, Calif.'s $180.75 million of Series 2016 general obligation refunding bonds.
The issue was priced to yield from 0.76% with a 4% coupon in 2017 to approximately 3.06% in 2039.
The deal is rated Aa1 by Moody's Investors Service and AA-plus by S&P Global Ratings.
Bank of America Merrill Lynch priced the Corona-Norco Unified School District, Calif.'s $101.32 million of Series 2016A&B GO refunding bonds.
The $70 million of Series A bonds were priced to yield from 0.76% with a 3% coupon in 2017 to 2.69% with a 4% coupon in 2036; a split 2039 maturity was priced as 3s to yield 3.07% and as 4s to yield 2.78%. The $31.24 million of Series B bond (2019 Crossover) were priced as 4s to yield 2.53% in 2033, 2.58% in 2034 and 2.64% in 2035.
The deal is rated Aa2 by Moody's and AA-minus by S&P.
Citigroup priced Palomar Health, Calif.'s $213.05 million of Series 2016 A&B general obligation refunding bonds.
The $48.52 million of Series 2016A bonds were priced to yield from 0.81% with a 2% coupon in 2017 to 2.51% with a 5% coupon in 2034. The $164.53 million of Series 2016B bonds were priced to yield from 0.81% with a 2% coupon in 2017 to 2.87% with a 4% coupon and 3.14% with a 3% coupon in a split 2037 maturity. The deal is rated A2 by Moody's, A by S&P and triple-A by Fitch.
BAML received the written award on the Rancho California Water District's $104.5 million of tax-exempt and taxable revenue and refunding bonds.
The issue was comprised of $30.64 million of Series 2016A tax-exempt fixed-rate revenue bonds, $37.97 million of Series 2016B tax-exempt fixed-rate refunding revenue bonds, and $35.91 million of Series 2016C taxable fixed-rate refunding revenue bonds. The deal is rated triple-A by S&P and AA-plus by Fitch.
In the competitive arena on Tuesday, Hennepin County, Minn., offered two separate issues totaling $155.32 million.
Citigroup won the $95 million of Series 2016B GOs with a true interest cost of 2.77%. The issue was priced as 5s to yield from 0.78% in 2017 to 2.20% in 2036.
Citi also won the $60.32 million of Series 2016C GO refunding bonds with a TIC of 1.47%. The issue was priced as 5s to yield from 0.78% in 2017 to 1.83% in 2028.
The deals are rated triple-A by S&P and Fitch Ratings.
The county last competitively sold comparable bonds on June 23, when BAML won $104.29 million of Series 2016A GOs with a true interest cost of 2.93%.
Since 2006, the county has issued about $1.7 billion of bonds, with the most issuance occurring in 2008 when it sold about $349 million of securities. The county did not come to market in 2015.
Secondary Market
The yield on the 10-year benchmark muni general obligation fell three basis points to 1.48% from 1.51% on Monday, while the yield on the 30-year dropped three basis points to 2.27% from 2.30%, according to the final read of Municipal Market Data's triple-A scale.
Treasuries were narrowly mixed on Tuesday. The yield on the two-year Treasury rose to 0.75% from 0.74% on Monday, the 10-year Treasury yield dropped to 1.56% from 1.59% and the yield on the 30-year Treasury bond decreased to 2.28% from 2.33%.
The 10-year muni to Treasury ratio on Tuesday was calculated at 95.2% compared to 95.1% on Monday, while the 30-year muni to Treasury ratio stood at 99.7% versus 98.3%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 32,765 trades on Monday on volume of $9.20 billion.
