Top-shelf municipal bonds finished considerably weaker on Tuesday, traders said, with yields on some maturities rising by as much as four basis points.
In the primary, it was one of the busiest days that traders had seen in a while as new deals aplenty hit the screens.
Secondary Market
The yield on the 10-year benchmark muni general obligation rose three basis points to 1.45% from 1.42% on Monday, while the yield on the 30-year muni increased four basis points to 2.17% from 2.13%, according to the final read of Municipal Market Data's triple-A scale.
Treasuries were mostly weaker. The yield on the two-year Treasury was unchanged from 0.67% on Monday, the 10-year Treasury yield rose to 1.54% from 1.49% and the yield on the 30-year Treasury bond increased to 2.29% from 2.23%.
The 10-year muni to Treasury ratio was calculated at 94.3% on Tuesday compared with 94.9% on Monday, while the 30-year muni to Treasury ratio stood at 94.9% versus 95.2%, according to MMD.
Primary Market
The week's nearly $12 billion calendar kicked off Tuesday, as Goldman, Sachs priced New York City's $800 million of general obligation bonds for institutions, following a two-day retail order period.
For institutions, the Fiscal 2017 Series A Subseries A-1 GOs were priced to yield from 0.60% with a 3% coupon in 2018 to 2.85% with a 2.75% coupon in 2040.
For retail, the issue had been priced to yield from 0.68% with 3% and 5% coupons in a split 2019 maturity to approximately 2.739% with a 2.625% coupon in 2040. No retail orders were taken in the 2030-2033 or 2037-2038 maturities.
The deal is rated Aa2 by Moody's Investors Service and AA by S&P Global Ratings and Fitch Ratings.
Goldman also remarketed the city's $55.46 million of Fiscal 2017 Series 1 GO's. The deal was priced as 5s to yield 0.90% in 2020, 1.05% in 2021 and 1.36% in 2023.
The Big Apple also competitively sold two separate issues of taxable GOs totaling $250 million.
JPMorgan Securities won the $172.95 million of Fiscal 2017 Subseries A-2 taxables with a true interest cost of 2.20%. Pricing information was not available. Bank of America Merrill Lynch won the $77.06 million of Fiscal 2017 Subseries A-3 taxables with a TIC of 2.66%. The GOs were priced at par to yield 2.52% in 2027 and 2.69% in 2028.
Also in the competitive arena, the state of Minnesota sold four separate issues of GOs totaling almost $788 million.
Barclays Capital won the $301.2 million of Series 2016D state various purpose refunding bonds with a TIC of 1.57%. The issue was priced to yield from 0.77% with a 5% coupon in 2020 to 2.36% with a 2.25% coupon in 2029.
Wells Fargo Securities won the $264.25 million of Series 2016A state various purpose bonds with a TIC of 2.29%. The deal was priced as 5s to yield from 0.48% in 2017 to 2.05% in 2036.
Morgan Stanley won the $215 million of Series 2016B state trunk highway bonds with a TIC of 2.13%. The deal was priced to yield from 0.48% with a 5% coupon in 2017 to 2.65% with a 3% coupon in 2036.
Raymond James won the $7.5 million of Series 2016C taxable state various purpose bonds with a TIC of 1.38% and priced them as 1.40s to yield 1.31% in 2021.
All of the sales are rated Aa1 by Moody's, AA-plus by S&P and triple-A by Fitch.
Since 2006, the Land of 10,000 Lakes has issued $12.43 billion of securities with the largest issuance coming in 2010 when it sold $1.77 billion.
"There is value in the market with all the supply we are seeing and people will want to take advantage of it, with all the accumulating positive flows we have seen plus reinvestments," a New York trader said. "There is still lots of cash out there and the investors are well focused."
The Miami-Dade County School District, Fla., competitively sold $200 million of Series 2016 GO school bonds.
BAML won the bonds with a TIC of 3.40%. The issue was priced as 5s to yield from 0.62% in 2017 to 2.53% in 2041; a 2046 term bond was priced as 5s to yield 2.58%. The deal is rated Aa3 by Moody's and A-plus by S&P.
Plano Independent School District in Texas sold $257.21 million of Series 2016 unlimited tax school building bonds.
Citigroup won the bonds with a TIC of 2.22%. The issue was priced to yield from 0.58% with a 5% coupon in 2017 to 2.90% with a 3% coupon in 2036. The deal is backed by the Permanent School Fund guarantee program and is rated triple-A by Moody's and S&P.
Ramirez & Co. priced San Antonio, Texas' $338.88 million of Series 2016 general improvement and refunding bonds, combination tax and revenue certificates of obligation, and tax notes.
The $211.94 million of Series 2016 general improvement and refunding bonds were priced to yield from 0.47% with a 3% coupon in 2017 to 2.54% with a 4% coupon in 2036.
The $98.39 million of Series 2016 combination tax and revenue certificates of obligation were priced to yield from 0.48% with a 2% coupon in 2017 to 2.54% with a 4% coupon in 2036.
The $28.55 million of Series 2016 tax notes were priced as 3s to yield 0.51% in 2017, as 5s to yield 0.57% in 2018 and as 5s to yield 0.65% in 2019.
The deal is rated triple-A by Moody's, S&P and Fitch.
Goldman, Sachs priced the Board of Regents of the University of Texas system's $376.03 million of Series 2016F revenue financing system bonds.
The deal was priced at par to yield 2% in 2041 in a stepped coupon bond, as 3s to yield 2.92% in 2045 and as 5s to yield 2.76% in 2047. The deal is rated triple-A by Moody's, S&P and Fitch.
Citi priced the Massachusetts Development Finance Agency's $149.63 million of Series 2016 revenue bonds for the Berklee College of Music.
The issue was priced to yield from 0.58% with a 4% coupon in 2017 to 2.53% with a 5% coupon in 2037; a 2039 maturity was priced as 5s to yield 2.55% and a 2046 maturity was priced as 5s to yield 2.59%. The deal is rated A2 by Moody's and A by S&P.
JPMorgan priced the Massachusetts Water Resources Authority's $104.55 million of Series 2016DF general revenue refunding green bonds.
The issue was priced as 5s to yield from 1.32% in 2024 to 2.19% in 2037; a 2042 maturity was priced as 3s to yield 2.94%. The deal is rated Aa1 by Moody's and AA-plus by S&P and Fitch.
BAML Priced the Maricopa Community College District, Ariz.'s $191.13 million of Series 2016 GO refunding bonds.
The issue was priced as 5s to yield from 0.60% in 2018 to 1.47% in 2025. The deal is rated triple-A by Moody's, S&P and Fitch.
Citi priced the Omaha Public Power District, Neb.'s $182.7 million of Series 2016A electric system revenue bonds.
The issue was priced to yield from 1.25% with a 5% coupon in 2023 to 3.01% with a 3% coupon and 2.56% with a 4% coupon in a split 2039 maturity. The deal is rated Aa2 by Moody's and AA by S&P.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 30,172 trades on Monday on volume of $11.95 billion.
