Top-quality municipal bonds finished mixed on Wednesday, traders said, as two big New York issues came to market.
Goldman Sachs priced the New York Metropolitan Transportation Authority's $1.06 billion of Hudson Rail Yards trust obligation bonds.
The issue was priced and repriced as 5s to yield 1.875% in 2046, 2.375% in 2051 and 2.625% in 2056.
"The bonds were pretty darn attractive to put it candidly," said a New York trader. "Anytime you get a short call structure with that size, plus the New York name behind it, there is going to be a lot of interest in it, and that was the case."
The deal is rated A2 by Moody's Investors Service and A-minus by Kroll Bond Rating Agency.
Ramirez & Co. priced the New York City Transitional Finance Authority's $800 million of tax-exempt Fiscal 2017 Series B Subseries B-1 future secured subordinate bonds for institutions on Wednesday after holding a two-day retail order period.
The deal was priced and repriced for institutions to yield from 0.77% with a 4% coupon in 2018 maturity to approximately 3.014% with a 3% coupon in 2042.
On Tuesday, Ramirez priced the issue for retail to yield from 0.85% with 4% and 5% coupons in a spilt 2019 maturity to approximately 3.014% with a 3% coupon in 2042. No retail orders were taken in the 2031, 2034 or 2036-2039 maturities. On Monday, the issue was priced for retail to yield from 0.84% with 4% and 5% coupons in a spilt 2019 maturity to 3% at par in 2042.
The deal is rated Aa1 by Moody's and triple-A by S&P Global Ratings and Fitch Ratings.
The NYC TFA also competitively sold two taxable bond deals on Wednesday.
JPMorgan Securities won the TFA's $187.51 million of Fiscal 2017 Series B Subseries B-2 future secured subordinate bonds with a true interest cost of 2.22%. The issue was priced to yield from 1.27% with a 1.35% coupon in 2020 to 2.59% at par in 2026.
Jefferies won the TFA's $62.5 million of Fiscal 2017 Series B Subseries B-3 future secured subordinate bonds with a TIC of 2.77%. The issue was priced at par to yield 2.67% in 2027 and 2.77% in 2028.
Wells Fargo Securities priced Rochester, Minn.'s $218.24 million of Series 2016B healthcare facilities revenue bonds for the Mayo Clinic. The issue was repriced to yield 2.25% with a 5% coupon in 2029 and 2.41% with a 5% coupon in 2031; and to yield from 2.55% with a 5% coupon in 2033 to 2.68% with a 5% coupon in 2036. The deal is rated Aa2 by Moody's and AA by S&P.
Citigroup priced the Dallas Area Rapid Transit's $229.72 million of Series 2016B senior lien sales tax revenue refunding bonds. The bonds were priced to yield from 0.99% with a 3% coupon and 5% coupon in a split 2019 maturity to 1.39% with a 4% coupon and 5% coupon in a split 2022 maturity. The bonds were also priced to yield from 2.05% with a 5% coupon in 2028 to 2.75% with a 4% coupon in 2038. The deal is rated Aa2 by Moody's and AA-plus by S&P.
JPMorgan priced Louisiana's $211.8 million of Series 2016A general obligation bonds. The issue was priced and repriced to yield from 0.73% with a 5% coupon in 2017 to 2.69% with a 5% coupon in 2036. The deal is rated Aa3 by Moody's, AA by S&P and AA-minus by Fitch.
Wells Fargo priced the county of Mecklenburg, N.C.'s 148.53 million of GO refunding bonds, which were priced to yield from 0.66% with a 4% coupon and 0.67% with a 4% coupon in a split 2017 maturity to 2.21% with a 2.75% coupon in 2029. The deal is rated triple-A by Moody's, S&P and Fitch.
In the competitive arena, the Virginia Public Building Authority sold three separate issues totaling $550 million.
Wells Fargo Securities won the $385.92 million of Series 2016A public facilities revenue bonds and Series 2016B refunding bonds with a TIC of 2.22%. The issue was priced to yield from 0.79% with a 5% coupon in 2018 to 2.96% with a 3% coupon in 2036; a 2017 maturity was offered as a sealed bid.
JPMorgan won the $147.43 million of Series 2016C public facilities revenue bonds subject to the alternative minimum tax with a TIC of 2.88%. The deal was priced to yield from 1% with a 5% coupon in 2018 to 2.61% with a 5% coupon in 2036.
Raymond James won the $13.72 million of Series 2016D taxable public facilities revenue bonds with a TIC of 3.56%. All three sales are rated Aa1 by Moody's and AA-plus by S&P and Fitch.
Since 2006, the PBA has sold about $3.8 billion of debt, with the largest issuance occurring in 2010 when it sold about $651 million. In the same period, the authority has issued less than $300 million five times. The lowest year of issuance came in 2012 when it issued $72.4 million.
Seattle, Wash., sold $151 million of Series 2016C municipal light and power improvement and refunding revenue bonds. Citi won the deal with a TIC of 2.94%. The issue was priced to yield from 0.70% with a 5% coupon in 2017 to 2.68% with a 4% coupon in 2037. A term bond in 2042 was priced as 4s to yield 2.80% and a term bond in 2046 was priced as 4s to yield 2.84%. The deal is rated Aa2 by Moody's and AA by S&P.
Rutherford County, Tenn., competitively sold $101 million of Series 2016B general obligation public improvement and school bonds. FTN Financial won the deal with a TIC of 2.36%. The bonds were priced to yield from 0.74% with a 3% coupon in 2018 to 2.68% with a 3% coupon in 2036. The deal is rated Aa1 by Moody's and AA-plus by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $3.52 billion to $15.75 billion on Wednesday. The total is comprised of $3.75 billion of competitive sales and $11.998 billion of negotiated deals.
Secondary Market
The yield on the 10-year benchmark muni general obligation fell one basis point to 1.56% from 1.57% on Tuesday, while the yield on the 30-year was unchanged from 2.28%, according to the final read of Municipal Market Data's triple-A scale.
"Everyone wanted some backup in the market and we got that healthy backup, there is still a reasonable amount of money flowing into the market," the New York trader said. "We are just wading through the supply, and that's where the focus will continue to be [in the primary] and not in the secondary."
He said that "we are getting through the supply, but at cheaper levels," adding that "Treasuries have gotten beat up pretty darn good, but munis are doing fairly well."
Treasuries were stronger on Wednesday. The yield on the two-year Treasury declined to 0.75% from 0.80% on Tuesday, the 10-year Treasury yield dropped to 1.69% from 1.73% and the yield on the 30-year Treasury bond decreased to 2.44% from 2.47%.
The 10-year muni to Treasury ratio was calculated at 92.4% on Wednesday compared to 90.6% on Tuesday, while the 30-year muni to Treasury ratio stood at 93.3% versus 92.4%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 36,408 trades on Tuesday on volume of $11.09 billion.
