Top-quality municipal bonds were weaker around midday traders said, with yields on some maturities strengthening by as much as five basis points.
The primary market was hit with a plethora of new issuance on Tuesday, from issuers in New York, North Carolina, Ohio, Maryland and Texas.
Primary Market
On Tuesday, Jefferies priced New York City's $800.010 million of Fiscal 2016 Series C and D general obligation bonds for institutions.
The $750.035 million of Series C bonds were priced to yield from 0.83% with a 3% coupon in 2019 to 3.00% with a 4% coupon in 2035. The 2017 and 2018 maturities were offered as sealed bids.
The $49.975 million of Series D bonds were priced to yield from 0.83% with a 5% coupon in 2019 to 3.09% with a 3% coupon in 2035. The 2016 to 2018 maturities were offered as sealed bids. The issue is rated Aa2 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings.
Since 2006, New York City issued bonds an average of 14 times a year, selling about $47 billion total, with the largest issuances in 2008 and 2009 when it offered $6.7 billion and $6.2 billion, respectively, and the lows in 2011 and 2014, when it issued $2.7 billion and $2.9 billion.
Bank of America Merrill Lynch priced the University of North Carolina at Chapel Hill's $400.96 million of taxable Series 2016C general revenue refunding bonds to yield from about 25 basis points above the comparable Treasury in 2018 to about 100 basis points above the comparable Treasury in 2028. A 2036 term bond was priced to yield about 77 basis points above the comparable Treasury. The deal is rated triple-A by Moody's, S&P and Fitch.
Baltimore County, Md., competitively sold three issues totaling about $255 million. The deals consist of $112 million of Series 2016 consolidated public improvement bonds, $88 million of 78th issue Metropolitan District bonds and $54.87 million of Series 2016 Metropolitan District refunding bonds. All three sales are rated triple-A by Moody's S&P and Fitch.
The $112 million deal was won by Citi with a true interest cost of 2.60%. The bonds were priced to yield from 0.57% with a 5% coupon in 2018 to 2.61% with a 5% coupon in 2036.
The $88 million deal was won by BAML with a TIC of 3.21%. The bonds were priced to yield from 0.44% with a 5% coupon in 2017 to 2.85% with a 5% coupon in 2041. A 2046 term bond was priced to yield 2.88% with a 5% coupon.
The $54.87 million deal was won by Wells Fargo with a TIC of 3.23%. The bonds were priced to yield from 0.45% with a 2% coupon in 2017 to 3.30% with a 3.125% coupon in 2038.
Ohio competitively sold five issues totaling $363.415million. The deals consists of $137.985 million of Series 2016A common schools GO refunding bonds, $100 million of Series 2016A taxable Third Frontier Research and Development GOs, $96.15 million of Series 2016A infrastructure improvement GO refunding bonds, $17.28 million of Series 2016A conservation projects GO refunding bonds, and $12 million of Series N coal development GOs. All five issues are rated Aa1 by Moody's and AA-plus by S&P and Fitch.
The $137.985 million series was won by RBC Capital Markets with a TIC of 1.57%. No other pricing information was immediately available.
The $100 million series was won by Wells Fargo with a TIC of 2.01%. The bonds were priced to yield from 0.74% with a 1.25% coupon in 2017 to 2.45% at par in 2026. The 2018 maturity was 19 basis points above the comparable Treasury and the 2026 maturity was 72 basis points above the comparable Treasury.
The $96.15 million series was won by Citi with a TIC of 1.91%. The bonds were priced to yield from 1.23% with a 5% coupon in 2022 to 2.19% with a 5% coupon in 2028.
The $12 million series was won by PNC Capital Markets with a TIC of 1.49%. No other pricing information was immediately available.
BAML priced the Hampton Roads Sanitation District, Va.'s $242.14 million of subordinate wastewater revenue bonds. The bonds were priced to yield from 0.62% with a 5% coupon in 2018 to 3.05% with a 5% coupon in 2041. A 2043 term bond was priced to yield 3.05% with a 5% coupon in 2043. The 2016 and 2017 maturities were offered as sealed bids.
Highland Park Independent School District, Texas, competitively sold $203.05 million of Series 2016 unlimited tax school building bonds. BAML won the issue with a TIC of 2.95%. The bonds were priced to yield from 0.62% with a 4% coupon in 2018 to 3.01% with a 4% coupon in 2036. The deal is backed by the Permanent School Fund Guarantee Program and is rated triple-A by both Moody's and Fitch.
Late Monday, JPMorgan Securities priced the Florida State Board of Administration Finance Corp.'s $1.2 billion of Series 2016A taxable revenue bonds at par to yield 2.163% in 2019, about 125 basis points over the comparable Treasury security; and to yield 2.638% in 2021, about 140 basis points over the comparable Treasury security.
Florida bond director Ben Watkins told The Bond Buyer he was very pleased with the sale's results.
"The plus 140 on the 2021s were right on top of where we were in the 2013 sale," Watkins said.
The relative market stability made it a good time to go early in the week, he said, adding, "It's always better to be first than last."
He said everything went smoothly.
"We were very pleased with the process. The deal went well and we were pleased to place all the $1.2 billion of bonds that we set out to sell."
The bonds are rated Aa3 by Moody's and AA by Standard & Poor's and Fitch.
Since 2006, the Florida Hurricane Catastrophe Fund issued about $12.2 billion, with the largest issuances in 2006 and 2007 when it offered $4.2 billion and $3.5 billion, respectively, and did not issue anything in 2009, 2011, 2012, 2014 or 2015.
Secondary Market
The yield on the 10-year benchmark muni general obligation was one to three basis points stronger from 1.68% on Monday, while the 30-year muni yield was as much as one basis point stronger from 2.78%, according to a read of Municipal Market Data's triple-A scale.
Treasuries were stronger on Tuesday around midday. The yield on the two-year Treasury fell to 0.74% from 0.76% on Monday, while the 10-year Treasury yield dipped to 1.74% from 1.76% and the 30-year Treasury bond yield decreased to 2.59% from 2.62%.
The 10-year muni to Treasury ratio was calculated on Monday at 95.3% compared to 95.0% on Friday, while the 30-year muni to Treasury ratio stood at 106.2% versus 105.7%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 35,455 trades on Monday on volume of $5.89 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $668.4 million to $9.04 billion on Monday. The total is comprised of $3.27 billion of competitive sales and $5.77 billion of negotiated deals.
