Top-quality municipal bonds were weaker at the close on Tuesday, traders said, with yields on some maturities strengthening by as much as five basis points.
The primary market was deluged with new bonds from issuers in New York, North Carolina, Ohio, Maryland and Texas.
Primary Market
On Tuesday, Jefferies priced and then repriced 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 repriced to yield from 0.50% with a 3% coupon in 2017 to 3.00% with a 4% coupon in 2035.
The $49.975 million of Series D bonds were repriced to yield from 0.20% with a 2% coupon in 2016 to 3.09% with a 3% coupon in 2035. 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. The bonds were priced at par to yield from 0.70% in 2016 to 2.779% in 2028. A 2036 term bond was priced at par to yield 3.327%. The deal is rated triple-A by Moody's, S&P and Fitch.
Baltimore County, Md., competitively sold three issues totaling about $265.705 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 $65.705 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 $367.005 million. 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, $20.87 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 $20.870 million series was won by PNC with a TIC of 1.59%. The $12 million series was won by PNC Capital Markets with a TIC of 1.49%.
BAML priced and then re-priced the Hampton Roads Sanitation District, Va.'s $242.23 million of subordinate wastewater revenue bonds. The bonds were repriced to yield from 0.20% with a 2% coupon in 2016 to 2.81% with a 5% coupon in 2037. A 2043 term bond was priced to yield 3.02% with a 5% coupon.
Citi priced and re-priced the Transmission Agency of Northern California's $175.065 million of revenue refunding bonds for the California-Oregon Transmission Project. The bonds were re-priced to yield from 0.81% with a 5% coupon in 2020 to 2.86% with a 5% coupon in 2039. The deal is rated Aa3 by Moody's and A-plus by S&P.
Highland Park Independent School District, Texas, competitively sold $206.660 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.
The largest competitive sale of the week will come from North Carolina on Wednesday, as the Old North State sells $330 million of GO refunding bonds. The deal is rated triple-A by Moody's, S&P and Fitch.
BOSC, Inc., is scheduled to price the Plano Independent School District, Texas' $305 million of unlimited tax refunding bonds, series 2016A and series 2016B on Wednesday.
Wisconsin is expected to competitively sell $297.685 million of general obligation bonds on Wednesday. The deal is rated AA by Fitch.
RBC Capital Market is slated to price the Maryland Economic Development Corporation's $135.32 million of student housing refunding revenue bonds for the University of Maryland at College Park Projects. The deal is backed by Assured Guaranty and is rated A2 by Moody's.
Secondary Market
The yield on the 10-year benchmark muni general obligation was three basis points stronger to 1.71% from 1.68% on Monday, while the 30-year muni yield was unchanged from 2.78%, according to a final read of Municipal Market Data's triple-A scale.
Treasuries were stronger on Tuesday at the market close. 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 2.60% from 2.62%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 98.1% compared to 95.3% on Monday, while the 30-year muni to Treasury ratio stood at 107.1% versus 106.2%, according to MMD.
