Top shelf municipals continued to weaken on Wednesday, traders said, as more supply kept on coming, with big deals from New York and Massachusetts being offered up to investors.
Secondary Market
The yield on the 10-year benchmark muni general obligation was one to three basis points stronger from 1.81% on Tuesday, while the 30-year muni yield was two to four basis points stronger from 2.86%, according to a read of Municipal Market Data's triple-A scale.
Treasuries were narrowly mixed on Wednesday. The yield on the two-year Treasury rose to 0.85% from 0.84% on Tuesday, while the 10-year Treasury yield gained to 1.86% from 1.83% and the 30-year Treasury bond yield was flat from 2.70%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 98.8% compared to 101.3% on Monday, while the 30-year muni to Treasury ratio stood at 105.8% versus 107.1%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,256 trades on Tuesday on volume of $7.79 billion.
Primary Market
Wells Fargo Securities priced the New York Metropolitan Transportation Authority's $594.23 million of Series 2016A dedicated tax fund refunding bonds for institutions on Wednesday after a one day retail order period.
The issue was priced for institutions to yield from 0.80% with a 5% coupon in 2019 to 3.25% at par and at 2.93% with a 5% coupon in a split 2036 maturity; 2016 and 2017 maturities were offered as sealed bids. The issue was priced for retail on Tuesday to yield from 0.81% with a 5% coupon in 2019 to 3.25% at par in 2036. The bonds are rated AA by Standard & Poor's and Fitch Ratings.
Bank of America Merrill Lynch priced Massachusetts' $1.11 billion of GOs, consisting of $600 million of new money consolidated loan of 2016 Series A bonds and the $507.70 million of 2016 Series A refunding bonds for retail investors on Wednesday.
The new money bonds were priced for retail to yield from 0.76% with a 5% coupon in 2019 to 2.80% with a 5% coupon in 2038; a 2041 maturity was priced as 4s to yield 3.30%. No retail orders were taken in the 2031-2032, 2034-2037 or 2046 maturities; the 2018 maturity was offered as a sealed bid.
The refunding bonds were priced for retail to yield from 0.94% with a 3% coupon in 2020 to 3.13% with a 3% coupon in 2033. No retail orders were taken in the 2027-2032 maturities; the 2016 maturity was offered as a sealed bid.
Proceeds of the sale will be used to finance state capital projects and will advance refund some portions of outstanding GOs. The issue is rated Aa1 by Moody's Investors Service, and AA-plus by S&P and Fitch.
Wells Fargo priced the San Diego Public Facilities Financing Authority's $405.27 million of Series 2016A senior sewer revenue refunding bonds, payable solely from installment payments secured by wastewater system net revenue.
The issue was priced to yield from 0.94% with 4% and 5% coupons in a split 2020 maturity to 2.91% with s 5% coupon in 2039; a 2016 maturity was offered as a sealed bid. The deal is rated AA by S&P and Fitch.
Since 2006, the authority has issued about $3.21 billion of debt, with the most issuance occurring in 2009 when it sold $1.57 billion of bonds. The authority did not come to market in 2008, 2011 or 2014.
Morgan Stanley priced the Fairfax County Economic Development Authority, Va.'s $168.30 million of Series 2016 transportation district improvement revenue refunding bonds for the Silver Line Phase I Project. The issue was priced to yield from 1.08% with a 5% coupon in 2021 to 3.13% with a 4% coupon in 2036. The bonds are rated Aa1 by Moody's and AA by S&P and Fitch.
Barclays Capital priced Ohio State University's $600 million of taxable Series 2016A general receipts bonds. The issue was priced as two bullet maturities in 2046 and 2056 to yield approximately 120 basis points over the comparable 30-year security and about 145 basis points over a 40-year. The deal is rated Aa1 by Moody's and AA by S&P and Fitch.
Piper Jaffray received the written award on the West Contra Costa Unified School District, Calif.'s $190.94 million of GO and GO refunding bonds. The $65 million of Series 2016A GO refunding bonds were priced to yield 0.45% with a 2% coupon in 2016 and from 0.70% with a 4% coupon in 2018 to 2.86% with a 5% coupon and 3.34% with a 3.125% coupon in a split 2035 maturity. The $65 million of Series 2016C Election of 2012 GOs were priced to yield from 0.45% with a 2% coupon in 2016 to 3.39% with a 3.25% coupon in 2036; a 2041 maturity was priced as 4s to yield 3.45%, a 2046 maturity was priced as 4s to yield 3.50% and a 2054 maturity was priced as 4s to yield 3.70%. The $65 million of Series 2016D Election of 2010 GOs were priced to yield from 0.45% with a 2% coupon in 2016 to 3.39% with a 3.25% coupon in 2036; a 2041 maturity was priced as 4s to yield 3.45%, a 2046 maturity was priced as 4s to yield 3.50% and a 2054 maturity was priced as 4s to yield 3.70%. The bonds are rated Aa3 by Moody's, AA-minus by S&P and AA-plus by Fitch.
Morgan Stanley priced the California Educational Facilities Authority's $100 million of Series 2016 revenue bonds for Pepperdine University. The issue was priced to yield from 0.75% with a 3% coupon in 2019 to 2.51% with a 5% coupon in 2031. A 2033 maturity was priced as 5s to yield 2.65%, a 2036 maturity was priced as 5s to yield 2.80%, a 2041 maturity was priced as 5s to yield 3.00%, a 2046 maturity was priced as 5s to yield 3.06% and a 2049 maturity was priced as 5s to yield 3.13%. The bonds are rated Aa3 by Moody's and AA by S&P and Fitch.
Wells Fargo Received the official award on the State University of New Jersey, Rutgers' $164.61 million of Series 2016M GO refunding bonds. The issue was priced to yield from 1.01% with a 5% coupon in 2020 to 3.37% with a 3.25% coupon in 2039. The bonds are rated Aa3 by Moody's, A-plus by S&P and AA-minus by Fitch.
JPMorgan priced the Orange County School Board, Fla.'s $218.87 million of Series 2016B and C certificates of participation. The $37.04 million Series 2016B COPs were priced to yield from 0.88% with a 2% coupon in 2019 to 2.39% with a 5% coupon in 2027. The $181.83 million of Series 2016C COPs were priced to yield from 1.06% with a 2% coupon in 2020 to 3.03% with a 5% coupon in 2034. The issue is rated Aa2 by Moody's and AA by Fitch.
In the competitive sector, the Orange County Sanitation District, Calif., sold $145.09 million of Series 2016A wastewater refunding revenue bonds. Barclays won the deal with a true interest cost of 3.02%. The issue was priced to yield from 0.83% with a 5% coupon in 2020 to 3.11% with a 4% coupon in 2039. The deal is rated triple-A by S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $5.91 billion to $7.09 billion on Wednesday. The total is comprised of $2.65 billion of competitive sales and $5.58 billion of negotiated deals.
S&PDJI: Puerto Rico Indexes Outperformed in Feb.
As Puerto Rico's debt plan begins to form, municipal bonds from Puerto Rico have outperformed in February, according to J.R. Rieger, Global Head of Fixed Income at S&P Dow Jones Indices.
The S&P
The General Obligation
Meanwhile, Louisiana and North Dakota -- both energy dependent states -- moved into negative territory last month with the S&P Municipal Bond
