Prices of top-rated municipal bonds closed weaker on Thursday, traders said, as yields rose as much as three basis points in some maturities.
The primary saw the last of the week's large deals come to market, with issuers from New York, Georgia and Texas leading the way.
Primary Market
Citigroup priced and then re-priced the New York Triborough Bridge & Tunnel Authority $541.235 million of Series 2016A MTA bridges and tunnels general revenue bonds for institutions on Thursday after a one-day retail order period on Wednesday.
The bonds were priced to yield from 0.36% with a 4% coupon in 2016 to 2.44% with a 5% coupon in 2031. The bonds were also priced to yield from 2.55% with a 5% coupon in 2033 to 2.70% with a 5% coupon in 2036. Term bonds in 2041 and 2046 were priced as 5s to yield 2.90% and 2.96%, respectively.
The issue was priced for retail to yield from 0.70% with 3% and 4% coupons in a split 2017 maturity to 2.48% with a 5% coupon in 2031 and from 2.59% with a 5% coupon in 2033 to 2.74% with a 5% coupon in 2036; a 2041 maturity was priced as 5s to yield 2.92% and a 2046 maturity was priced as 5s to yield 2.98%. A 2016 maturity was offered as a sealed bid.
The bonds were rated Aa3 by Moody's Investors Service and AA-minus by both Standard & Poor's and Fitch Ratings and AA by Kroll Bond Rating Agency.
Since 2006, the TBTA has sold about $8.8 billion of bonds, with the most issuance occurring in 2008 and 2012 when it issued $2.19 billion and $1.79 billion, respectively. The authority has issued bonds roughly three times a year since 2006.
Stifel is expected to price Gwinnet County School District, Ga.'s $305 million of GO sales tax bonds. The bonds were priced to yield from 0.77% with a 3% coupon in 2018 to 1.19%, 1.19% and 1.27% with a 5% coupon, 2% coupon and 5% coupon in a triple-split 2022 maturity. The issue is rated triple-A by Moody's and S&P.
The Board of Regents of the University of Houston System sold two deals totaling $285.495 million.
Bank of America Merrill Lynch won the $101.145 million of Series 2016A tax-exempt consolidated revenue and refunding bonds with a true interest cost of 2.81%. The bonds were priced to yield from 0.55% with a 5% coupon in 2017 to 3.32% with a 4% coupon in 2041. A 2047 term bond was priced to yield 3.38% with a 4% coupon.
Raymond James won the $184.350 million of Series 2016B taxable consolidated revenue and refunding bonds with a TIC of 3.14%. The bonds were priced to yield 0.70% with a 3.25% in 2017 and priced at par with a 3.31% coupon in 2029. The 2033 and 2036 term bonds were priced at par with a 3.49% coupon and a 3.59% coupon.
Both sales were rated Aa2 by Moody's and AA by S&P.
Citi priced the Vermont Educational and Health Buildings Financing Agency's $176.56 million of revenue bonds for the University of Vermont Medical Center Project. The bonds were priced to yield from 0.60% with a 3% coupon in 2016 to 3.64% and 3.17% with a 3.5% coupon and 5% coupon in a split 2026 maturity. The deal is rated A3 by Moody's and A-minus by both S&P and Fitch.
Secondary Market
The yield on the 10-year benchmark muni general obligation rose one basis point to 1.72% from 1.71% on Wednesday, while the 30-year muni yield climbed three basis points to 2.71% from 2.68%, according to a final read of Municipal Market Data's triple-A scale
Treasuries were weaker on at the close. The yield on the two-year Treasury rose to 0.83% from 0.82% on Wednesday, while the 10-year Treasury yield rose to 2.02% from 1.97% and the 30-year Treasury bond yield increased to 2.80% from 2.75%.
The 10-year muni to Treasury ratio was calculated on Thursday at 83.4% compared to 86.0% on Wednesday, while the 30-year muni to Treasury ratio stood at 96.0% versus 97.0%, according to MMD.
