N.Y. MTA advance refunding deal looks set to get good reception from buyers

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Underwriters priced the New York Metropolitan Transportation Authority’s $2.2 billion advance refunding deal for institutions on Tuesday. The green bonds were offered to retail buyers on Monday, who ordered about $770 million of the bonds, according to a market source.

Secondary market
The yield on the 10-year benchmark muni general obligation rose as much as two basis points from 2.01% on Monday, while the 30-year GO yield increased as much as two basis points from 2.70%, according to a read of Municipal Market Data’s triple-A scale.

U.S. Treasuries were mixed on Tuesday. The yield on the two-year Treasury rose to 1.76% from 1.75% on Monday, the 10-year Treasury yield fell to 2.35% from 2.37% and the yield on the 30-year Treasury decreased to 2.76% 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 2.288%, 30-year at 2.805%
The MBIS municipal non-callable 5% GO benchmark scale was stronger in mid-morning trading.

The 10-year muni benchmark yield dipped to 2.288% on Tuesday from the final read of 2.291% on Monday, according to Municipal Bond Information Services, a national consortium of municipal interdealer brokers. The MBIS 30-year benchmark muni yield slipped to 2.805% from 2.806%.

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.

Primary market
Bank of America Merrill Lynch priced the N.Y. MTA’s $2.2 billion of Series 2017C transportation revenue refunding green bonds for institutions after holding a one-day retail order period.

On Tuesday, the $1.974 billion of Series 2017C-1 current interest bonds were priced to yield from 1.88% with a 5% coupon in 2023 to 3.37% with a 4% coupon in 2039.

The $202.986 million of Series 2017C-2 capital appreciation bonds were priced to yield 2.96% in 2027, 3.14% in 2029, 3.30% in 2032, 3.36% in 2033 and from 3.57% in 2039 to 3.61% in 2046.

On Monday, the $1.997 billion of Series 2017C-1 CIBs 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 for retail to yield 2.95% in 2027, 3.13% in 2029 and from 3.56% in 2039 to 3.63% in 2046.

A market sources said several of the maturities were oversubscribed during the retail order period.

The deal is rated A1 by Moody’s Investors Service, AA-minus by S&P Global Ratings and Fitch Ratings and AA-plus by Kroll Bond Rating Agency.

Since 2007, the MTA has sold about $35.76 million of debt, with the most issuance occurring in 2012 when it sold $6.69 billion. It sold the last amount of bonds in that period in 2007, when it issued $1.27 billion of securities.
Also on Tuesday, Wells Fargo Securities is expected to price the Virginia Transportation Board’s $479.41 million of Series 2017 federal transportation grant anticipation revenue and refunding notes.

The deal is rated Aa1 by Moody’s and AA-plus by S&P and Fitch.

RBC Capital Markets is set to price Colorado’s $268.84 million of Building Excellent Schools Today certificates of participation.

The deal is rated Aa2 by Moody’s and AA-minus by S&P.

JPMorgan Securities is expected to price the Louisiana Local Government Environmental Facilities and Community Development Authority’s $250 million of revenue refunding bonds on Tuesday.

The deal is rated Baa3 by Moody’s and BBB by S&P and Fitch.

The competitive arena sees the biggest deal of the week when Orange County, N.Y., is selling $73.23 million of public improvement serial bonds in three separate offerings.

The deals consist of $55.51 million of Series 2017A bonds, $13.21 million of Series 2017B bonds and $4.52 million of Series 2017C taxable bonds.

The deals are rated Aa3 by Moody’s.

Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar increased $3.75 billion to $10.58 billion on Tuesday. The total is comprised of $4.03 billion of competitive sales and $6.55 billion of negotiated deals.

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.

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Primary bond market Secondary bond market Metropolitan Transportation Authority Louisiana Government Environmental Facilities & Community Development Authority Virginia Commonwealth Transportation Board State of Colorado