Top quality municipal bonds were steady to weaker at mid-session, traders said as a raft of new issue supply hit the market.
Citigroup priced the Los Angeles Unified School District's $1.23 billion of general obligation and refunding bonds on Tuesday.
The $648.96 million of Election of 2008 Series 2016A GO dedicated unlimited ad valorem property tax bonds were priced to yield from 0.65% with a 5% coupon in 2018 to 3.23% with a 3.50% coupon in 2036; a 2040 split maturity was priced as 4s to yield 3.27% and as 5s to yield 2.92%; a 2017 maturity was offered as a sealed bid.
The $576.99 million of 2016 Series A GO refunding dedicated unlimited ad valorem property tax bonds were priced to yield from 0.65% with a 4% coupon in 2018 to 2.35% with a 5% coupon in 2030; the 2016 and 2017 maturities were offered as sealed bids.
The deal is rated Aa2 by Moody's Investors Service, AAA by Fitch Ratings and AA-plus by Kroll Bond Rating Agency.
Since 2006, LAUSD has sold about $14.4 billion of bonds, with the most issuance occurring in 2007 and 2009 and when it offered $2.91 and $2.92 billion of debt, respectively. The district did not come to market in 2013.
Barclays Capital priced the New York Utility Debt Securitization Authority's $637.64 million of Series 2016A tax-exempt restructuring bonds. The deal was upsized considerably from the $382 million originally planned.
The issue was priced to yield from 1.60% with a 5% coupon and 1.68% with a 5% coupon in a split 2025 maturity to 2.63% with a 5% coupon in 2035. The deal is rated triple-A by Moody's, Standard & Poor's and Fitch, and carries stable outlooks from all three rating agencies.
Citi priced the Kentucky State Property and Buildings Commission's $677.33 million of Series A Project No. 112 revenue bonds and Series B Project 112 revenue refunding bonds. The $116.45 million of Series A bonds were priced to yield from 0.89% with a 2% coupon in 2018 to 3.23% with a 5% coupon in 2036; a 2017 maturity was offered as a sealed bid. The $560.88 million Series B bonds were priced to yield from 0.98% with a 5% coupon in 2018 to 2.83% with a 5% coupon in 2028; 2016 and 2017 maturities were offered as sealed bids. The deal is rated Aa3 by Moody's, A by S&P and A-plus by Fitch.
Wells Fargo Securities priced for retail investors the New York Metropolitan Transportation Authority's $591.68 million of Series 2016A dedicated tax fund refunding bonds. The issue was priced to yield from 0.81% with a 5% coupon in 2019 to 3.25% at par in 2036; 2016 and 2017 maturities were offered as sealed bids. The bonds are rated AA by S&P and Fitch.
Citi priced the New York City Municipal Water Authority's $352.86 million of Fiscal 2016 Subseries CC-1 water and sewer system second general resolution revenue bonds. The issue was priced as 4s to yield 0.92% in 2020 and 1.10% in 2021; as 4s to yield 3.03% and as 5s to yield 2.68% in a split 2033 maturity; and to yield from 2.83% with a 5% coupon in 2036 to 3.27% with a 4% coupon and 2.93% with a 5% coupon in a 2038 maturity. The deal is rated Aa1 by Moody's, and AA-plus by S&P and Fitch.
Barclays priced the California Statewide Communities Development Authority's $282.74 million of Series 2016 student housing refunding revenue bonds for the UC Irvine Campus Apartments. The issue was priced to yield from 0.40% with a 3% coupon in 2016 to 3.75% with a 3.50% coupon in 2036; a 2040 maturity was priced as 5s to yield 3.54%. The deal is rated Baa1 by Moody's.
In the competitive arena on Tuesday, Delaware sold three issues totaling $222.38 million.
Morgan Stanley won the $164.84 million of Series 2016A GOs with a true interest cost of 2.45%. Bank of America Merrill Lynch won the $37.15 million of Series 2016C GO refunding bonds with a TIC of 1.63%. JPMorgan Securities won the $20.40 million of Series 2016B AMT GOs with a TIC of 0.68%. All three sales are rated triple-A by Moody's, S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $504.9 million to $13.00 billion on Tuesday. The total is comprised of $2.98 billion of competitive sales and $10.02 billion of negotiated deals.
Secondary Market
The yield on the 10-year benchmark muni general obligation was one to three basis points stronger from 1.76% on Monday, while the 30-year muni yield was two to four basis points stronger from 2.80%, according to a read of Municipal Market Data's triple-A scale.
Treasuries were lower on Tuesday. The yield on the two-year Treasury rose to 0.83% from 0.79% on Monday, while the 10-year Treasury yield gained to 1.81% from 1.74% and the 30-year Treasury bond yield increased to 2.67% from 2.62%.
The 10-year muni to Treasury ratio was calculated on Monday at 101.3% compared to 99.8% on Friday, while the 30-year muni to Treasury ratio stood at 107.1% versus 106.2%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 34,992 trades on Monday on volume of $6.88 billion.
