Prices of top-rated municipal bonds were weaker at mid-session, according to traders, as yields on some maturities increased by as much as four basis points.
In the negotiated sector, the $2 billion New Jersey Economic Development Authority offering was priced for institutions. In the competitive arena, the Cobb-Marietta Coliseum and Exhibit Hall Authority sold $372.55 million of bonds to help finance a new Atlanta Braves stadium.
Secondary Market
The yield on the 10-year benchmark muni general obligation on Tuesday was one to three basis points stronger from 2.09% on Monday, while the yield on the 30-year GO was two to four basis points stronger from 3.00%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were lower on Tuesday, with the yield on the two-year Treasury note rising to 0.62% from 0.56% on Monday, while the 10-year yield rose to 2.10% from 2.02% and the 30-year yield increased to 2.84% from 2.75%.
The 10-year muni to Treasury ratio was calculated on Monday at 104.7% versus 103.9% on Friday, while the 30-year muni to Treasury ratio stood at 110.4% compared to 109.3%, according to MMD.
Primary Market
Bank of America Merrill Lynch priced the New Jersey Economic Development Authority's $2.2 billion of bonds for institutions on Tuesday.
The bonds had a two-day retail order period as BAML priced the authority's $1.658 billion of school facilities construction bonds and refunding bonds, Series WW and XX, for retail on Friday and then repriced it on Monday.
The $500 million of Series 2015 WW school facilities construction bonds were priced for institutions to yield from 4.63% with a 4.625% coupon and a 5.25% coupon in a split 2028 maturity to 5.13% with a 5.125% coupon in 2038. A 2040 term bond was priced to yield 5.19% with a 5.25% coupon.
The $1.12 billion of Series 2015 XX school facilities construction refunding bonds were priced to yield from 3.55% with a 3.25% coupon and a 5% coupon in a split 2020 maturity to 4.59% with a 5% coupon in 2027.
A sale of $574 million of Series 2015YY taxable school facilities construction refunding bonds was also scheduled. Details were not immediately available.
The issue was rated A3 by Moody's Investors Service and A-minus by Standard and Poor's and Fitch Ratings.
Since 1995, the New Jersey EDA has issued roughly $41.65 billion of debt. The years of 2004 and 2005 saw the most issuance with $4.54 billion and $4.11 billion, respectively. The authority had low issuance years in 1995 and 2005, when they issued just $445 million and $414 million, respectively.
In the competitive arena, the Cobb-Marietta Coliseum and Exhibit Hall Authority, Ga., sold $372.55 million of Series 2015 taxable revenue bonds for the Atlanta Braves' new stadium.
Wells Fargo Securities won the issue with a true interest cost of 4.39%. Pricing information was not immediately available. The deal was rated triple-A by Moody's, S&P and Fitch.
The bonds were issued by the authority through an agreement with Cobb County and the proceeds will be used as the county's contribution to a $672 million 41,500-seat Major League Baseball stadium.
Morgan Stanley priced the state of California's $1.9 billion of various purpose general obligation and GO refunding bonds for retail ahead of the institutional pricing on Wednesday.
The $550 million of various purpose GO bonds were priced to yield from 0.61% with a 4% coupon in 2017 to 2.23% with a 5% coupon in 2024. A split 2045 term bond was priced as 4s and as 5s to yield 3.80% and 3.35%, respectively. A 2016 maturity was offered as a sealed bid.
The $1.35 billion of various purpose GO refunding bonds were priced to yield from 0.61% with 2% and 3% coupons in a split 2017 maturity to 3.14% with a 5% coupon in 2035. The 2016 maturity was offered as a sealed bid.
The deal was rated Aa3 by Moody's, AA-minus by S&P and A-plus by Fitch.
About $1.35 billion from the sale will be used to refinance existing debt, with the remaining amount providing permanent financing for capital facilities or other voter-approved projects and public facilities.
PRASA Deal Reportedly Off Table, for Now
The Puerto Rico Aqueduct & Sewer Authority has decided to delay issuing $750 million of revenue bonds due to uncertainty in the market, according to a published report.
The PRASA deal had been expected to price last week, but was pushed back and placed on the day-to-day new issue calendar.
There was "[s]ome dissension amongst investors over inclusion or lack thereof regarding level of covenant protections," a source told The Bond Buyer on Tuesday. "So some are pleased it was pulled, while others are upset."
On Monday, Government Affairs Secretary Jesús Manuel Ortiz told Caribbean Business "the process to achieve the issuance continues. We are confident that we can finalize it as soon as possible. We are, right now, working to close the transaction."
On Tuesday, however, Caribbean Business reported that PRASA executive president Alberto Lázaro told a local newspaper in Puerto Rico the deal was off the table for now. The report said he cited factors that included a plan deadline for the commonwealth's fiscal stability and economic development plan and a Puerto Rico Electric Power Authority (PREPA) restructuring plan, and the commonwealth's decision to ask the U.S. Supreme Court for a ruling to overturn a ban that prevents public agencies from restructuring.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 31,208 trades on Monday on volume of $5.363 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $28.3 million to $12.12 billion on Tuesday. The total is comprised of $3.03 billion competitive sales and $9.09 billion of negotiated deals.
Shelly Sigo and Christine Albano contributed to this report
