The New York Metropolitan Transportation Authority came to market on Monday, offering $2.2 billion of advance refunding bonds to retail buyers.
Bank of America Merrill Lynch priced the N.Y. MTA’s Series 2017C transportation revenue refunding green bonds for retail ahead of the institutional pricing on Tuesday.
The offer may foreshadow a spate of deals over the next two weeks. Analysts say issuers are likely to rush advanced refunding transactions to market in time to close before the end of the year, when the financing tool may be banned under tax legislation under consideration in both houses of Congress.
The Bond Buyer's 30-day visible supply calendar increased by $3.75 billion to $10.58 billion. The total is comprised of $4.03 billion of competitive sales and $6.55 billion of negotiated deals.
Market sources said the MTA deal was well received by retail.
The $1.997 billion of Series 2017C-1 current interest bonds were priced for retail to yield 1.27% with a 5% coupon in 2018 and from 1.88% with a 5% coupon in 2023 to 3.36% with a 4% coupon in 2039.
The $199.998 million of Series 2017C-2 capital appreciation bonds were priced to yield 2.95% in 2027, 3.13% in 2029 and from 3.56% in 2039 to 3.63% in 2046.
“Our retail order period is going very well,” said MTA spokesman Aaron Donovan. “We’re looking forward to showing the transaction to institutional investors on Tuesday.”
Ipreo estimates total bond volume for the holiday-shortened week at $4.18 billion, which consists of $3.96 billion of negotiated deals and $217.1 million of competitive sales.
Also on Monday, BAML priced the North Broward Hospital District, Fla.’s $318.15 million of Series 2017B revenue bonds for Broward Health.
The issue was priced as 5s to yield from 1.85% in 2019 to 3.89% in 2038, 3.94% in 2042 and 3.99% in 2048.
The deal is rated Baa2 by Moody’s and BBB-plus by S&P.
New York City plans to sell about $850 million of general obligation refunding bonds on Wednesday, Dec. 6 after a two-day retail order period. Proceeds from the tax-exempt fixed-rate bond sale will be used to refund outstanding debt. The bonds will be priced by the city’s underwriting syndicate, led by book-running senior manager Ramirez & Co. with Bank of America Merrill Lynch, Citigroup, Goldman Sachs, Jefferies, J.P. Morgan Securities, Loop Capital Markets, RBC Capital Markets and Siebert Cisneros Shank & Co. serving as co-senior managers.
Prior week's actively traded issues
Revenue bonds comprised 55.53% of new issuance in the week ended Nov. 17, down from 55.82% in the previous week, according to Markit. General obligation bonds made up 39.17% of total issuance, up from 38.78%, while taxable bonds accounted for 5.30%, down from 5.40%.
Some of the most actively traded bonds by type were from Puerto Rico, Ohio and New Jersey.
In the GO bond sector, the Puerto Rico 8s of 2035 were traded 26 times. In the revenue bond sector, the Ohio Air Quality Development Authority 4.5s of 2048 were traded 70 times. And in the taxable bond sector, the New Jersey Educational Facilities Authority 3.836s of 2047 were traded 17 times.
Top-rated municipals ended weaker on Monday. The yield on the 10-year benchmark muni general obligation rose one basis point to 2.01% from 2.00% on Friday, while the 30-year GO yield increased one basis point to 2.70% from 2.69%, according to the final read of Municipal Market Data’s triple-A scale.
U.S. Treasuries were mixed. The yield on the two-year Treasury rose to 1.75% from 1.73% on Friday, the 10-year Treasury yield gained to 2.37% from 2.35% and the yield on the 30-year Treasury was unchanged from 2.79%.
On Monday, the 10-year muni-to-Treasury ratio was calculated at 84.9% compared with 85.0% on Friday, while the 30-year muni-to-Treasury ratio stood at 96.8% versus 96.2%, according to MMD.
MBIS 10-year muni at 2.283%, 30-year at 2.80%
The MBIS municipal non-callable 5% GO benchmark scale was mixed in late trading.
The 10-year muni benchmark yield fell to 2.283% on Monday from the final read of 2.288% on Friday, according to Municipal Bond Information Services, a national consortium of municipal interdealer brokers. The MBIS 30-year benchmark muni yield rose to 2.800% from 2.794%.
The MBIS benchmark index is a yield curve built on market data aggregated from MBIS member firms and is updated hourly on the Bond Buyer Data Workstation.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 37,148 trades on Friday on volume of $10.14 billion.
Previous week's top underwriters
The top municipal bond underwriters of last week included Bank of America Merrill Lynch, JPMorgan Securities, Citigroup, Wells Fargo Securities and RBC Capital Markets, according to Thomson Reuters data.
In the week of Nov. 12 to Nov. 18, BAML underwrote $2.12 billion, JPMorgan $1.44 billion, Citi $1.23 million, Wells $604.2 million, and RBC $585.4 million.
Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation. Click here for a brief tour of the Workstation, or contact Vanessa Kim at 212-803-8474 for more information.