Top quality municipal bonds finished unchanged on Tuesday, according to traders, as the first of the week's big new offerings started to hit the market, led by a negotiated deal in Georgia and a Colorado competitive sale.
Secondary Market
The yield on the 10-year benchmark muni general obligation on Tuesday was flat from 1.72% on Monday, while the yield on the 30-year was steady at 2.54%, according to the final read of Municipal Market Data's triple-A scale.
U.S. Treasuries were mixed on Tuesday. The yield on the two-year rose to 0.85% from 0.84% on Monday, the 10-year Treasury yield was unchanged from 1.76% and the yield on the 30-year Treasury bond decreased to 2.50% from 2.52%.
On Tuesday, the 10-year muni to Treasury ratio was calculated at 97.9% compared to 99.1% on Monday, while the 30-year muni to Treasury ratio stood at 101.6% versus 102.0%, according to MMD.
Primary Market
Bank of America Merrill Lynch priced a $419.42 million deal for the Piedmont Healthcare Inc. project in Georgia for three separate authorities.
The Fulton County Development Authority's $196.23 million of Series 2016A revenue bonds were priced to yield from 0.83% with a 3% coupon in 2017 to 3.59% with a 4% coupon in 2036; a split 2041 maturity was priced as 3 5/8s to yield 3.80% and as 4s to yield 3.69% and a split 2046 maturity was priced as 4s to yield 3.74% and as 5s to yield 3.32%.
The Clarke County Hospital Authority's $175.55 million of Series 2016A revenue anticipation certificates were priced to yield from 0.83% with a 3% coupon in 2017 to 3.72% with a 3.50% coupon in 2036; a split 2041 maturity was priced as 4s to yield 3.69% and as 3 5/8s to yield 3.80% while a 2046 maturity was priced as 5s to yield 3.32%.
The Fayette County Hospital Authority's $47.64 million of Series 2016A revenue anticipation certificates were priced as 5s to yield 1.97% in 2024, 2.15% in 2025, 3.12% in 2034, 3.16% in 2035, 3.19% in 2036 and 3.32% in 2046.
The deal is rated Aa3 by Moody's Investors Service and AA-minus by S&P Global Ratings.
Wells Fargo Securities priced the Virginia Commonwealth Transportation Board's $316.93 million of Series 2016 federal transportation grant anticipation notes.
The issue was priced to yield from 0.68% with a 2% coupon and 0.74% with a 5% coupon in a split 2017 maturity to 2.42% with a 5% coupon in 2031. The deal is rated Aa1 by Moody's and AA-plus by S&P and Fitch Ratings.
Since 2006, the CTB has sold $4 billion of securities, with the largest issuance occurring in 2012, when it sold $1.19 billion. It did not sell any bonds in 2008 or 2015. Including Tuesday's sale, the CTB has issued $666 million of debt so far this year, the highest amount since 2012.
Citigroup priced the Salem Hospital Facilities Authority, Ore.'s $197.76 million of Series 2016A revenue refunding bonds for Salem Health projects.
The issue was priced to yield from 0.83% with a 2% coupon in 2017 to 3.62% with a 3.50% coupon in 2037; a 2041 maturity was priced as 4s to yield 3.64% and a split 2046 maturity was priced as 4s to yield 3.69% and as 5s to yield 3.29%. The deal is rated A-plus by S&P and Fitch.
Morgan Stanley priced the Board of Regents of the University of Texas System's $185.28 million of Series 2016I revenue financing system refunding bonds.
The issue was priced as 5s to yield from 0.85% in 2018 to 1.64% in 2024. The deal is rated triple-A by Moody's, S&P and Fitch.
BAML priced the Maryland Health and Higher Educational Facilities Authority's $120.06 million of Series 2016 revenue bonds for Lifebridge Health.
The issue was priced to yield from 0.88% with a 2% coupon in 2017 to 3.54% with a 4% coupon in 2036; a 2041 maturity was priced as 4s to yield 3.64% and a 2047 maturity was priced as 5s to yield 3.27%. The deal is rated A1 by Moody's and A-plus by S&P.
In the competitive arena on Tuesday, the city and county of Denver, Colo., sold $115 million of Series 2016 wastewater enterprise revenue bonds. BAML won the issue with a true interest cost of 3.14%.
The issue was priced to yield from 0.75% with a 5% coupon in 2017 to 2.78% with a 4% coupon in 2036; a 2041 maturity was priced as 4s to yield 2.92% and a 2046 maturity was priced as 4s to yield 2.97%. The deal is Aa1 by Moody's and triple-A by S&P and Fitch.
Previously, the issuer last sold comparable bonds competitively on Jan. 11. 2012, when JPMorgan Securities won $50.43 million of Series 2012 wastewater enterprise revenue bonds with a TIC of 2.26%.
