Prices of top-rated municipal bonds were weaker at mid-session, according to traders, as the New York City Transitional Finance Authority sold $750 million of bonds.
Secondary Market
The yield on the 10-year benchmark muni general obligation was as much as two basis points stronger from 1.60% on Monday, while the 30-year muni yield was as much as two basis points stronger from 2.55%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were also weaker on Tuesday. The yield on the two-year Treasury climbed to 0.73% from 0.70% on Monday, while the 10-year Treasury yield rose to 1.77% from 1.73% and the 30-year Treasury bond yield increased to 2.59% from 2.56%.
The 10-year muni to Treasury ratio was calculated at 92.9% on Monday compared with 92.6% on Friday, while the 30-year muni to Treasury ratio stood at 99.6% versus 99.5%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 33,908 trades on Monday on volume of $7.08 billion.
Primary Market
There was action aplenty in the competitive arena on Tuesday.
The NYC TFA competitively sold $750 million of bonds in three separate offerings of tax-exempt and taxable debt.
Bank of America Merrill Lynch won $500 million of Fiscal 2016 Series F Subseries F-3 future tax secured tax-exempt subordinate bonds with a true interest cost of 3.18%. The issue was priced to yield from 2.06% with a 5% coupon in 2029 to 3.35% with a 3.25% coupon in 2042.
Citigroup won $198.395 million of Fiscal 2016 Series F Subseries F-1 future tax secured taxable subordinate bonds with a TIC of 2.29%. The issue was priced at par to yield from 0.90% in 2018, or 18 basis points above the comparable Treasury security, to 2.76% in 2026, or 100 basis points above the comparable Treasury security.
Citi won $51.605 million of Fiscal 2016 Series F Subseries F-2 future tax secured taxable subordinate bonds with a TIC of 2.94%. The issue was priced at par to yield 2.86% in 2027, or 110 basis points above the comparable Treasury security, and 2.96% in 2028, or 120 basis points above the comparable Treasury security.
All three deals are rated Aa1 by Moody’s Investors Service and triple-A by Standard & Poor’s and Fitch Ratings.
The Platte River Power Authority, Colo., competitively sold $154.6 million of Series JJ power revenue bonds.
JPMorgan Securities won the deal with a TIC of 2.19%. The issue was priced to yield from 0.70% with a 5% coupon in 2018 to 2.45% with a 5% coupon in 2036. The bonds are rated AA by S&P and Fitch.
Las Vegas, Nev., competitively sold $138 million of bonds in three offerings.
Morgan Stanley won the $82.46 million of Series 2016A limited tax general obligation performing arts center refunding bonds additionally secured by pledged revenues with a TIC of 2.90%. Pricing information was not immediately available.
BAML won the $39.66 million of Series 2016B limited tax GO various purpose refunding bonds additionally secured by pledged revenues with a TIC of 2.75%. Pricing information was not immediately available.
Citi won the $16.19 million of Series 2016C limited tax GO sewer refunding bonds additionally secured by pledged revenues with a TIC of 1.07%. Pricing information was not immediately available.
All three deals are rated Aa2 by Moody’s and AA by S&P.
In the negotiated sector, Morgan Stanley priced the California Infrastructure and Economic Development Bank’s $414.21 million of clean water state revolving fund revenue green bonds for retail investors ahead of the institutional pricing on Wednesday.
The issue was priced to yield from 0.65% with a 3% coupon in 2018 to 2.30% with a 5% coupon in 2035; a 2017 maturity was offered as a sealed bid. The deal is rated triple-A by Moody’s, S&P and Fitch.
Since 2006, the IEDB has issued over $6.6 billion of debt, with the most issuance occurring in 2008 when $1.87 billion of bonds were sold. The least amount of debt was offered in 2012 when $265 million of bonds were sold.
Loop Capital Markets priced the state of Ohio’s $231 million of Series S general obligation highway capital improvement bonds, backed by its full faith and credit and highway user receipts.
The issue was priced to yield from 0.69% with 2% and 5% coupons in a split 2018 maturity to 2.16% with a 5% coupon in 2031. The deal is rated Aa1 by Moody’s, triple-A by S&P and AA-plus by Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $2.693 billion to $12.93 billion on Tuesday. The total is comprised of $5.23 billion of competitive sales and $7.70 billion of negotiated deals.
