Top-rated municipal bonds were stronger at mid-session, according to traders, who were seeing another wave of supply hit the market.

Secondary market
The yield on the 10-year benchmark muni general obligation fell as much as two basis points from 2.05% on Tuesday, while the 30-year GO yield dropped one to three basis points from 2.86%, according to a read of Municipal Market Data's triple-A scale.

Treasuries were stronger on Wednesday. The yield on the two-year Treasury fell to 1.35% from 1.38% on Tuesday, the 10-year Treasury yield dropped to 2.32% from 2.36% and the yield on the 30-year Treasury bond decreased to 2.89% from 2.92%.

On Tuesday, the 10-year muni to Treasury ratio was calculated at 87.0%, compared with 86.5% on Monday, while the 30-year muni to Treasury ratio stood at 97.9% versus 97.8%, according to MMD.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 44,309 trades on Tuesday on volume of $8.61billion.

Primary market
Goldman Sachs priced the Port Authority of New York and New Jersey’s $831.85 million of consolidated bonds on Wednesday for retail investors ahead of the institutional pricing on Thursday.

The $731.85 million of Series 205 bonds were priced as 5s to yield from 1.15% in 2019 to 2.99% in 2037. A split 2042 maturity was priced as 5 1/4s to yield 2.99% and as 5s to yield 3.09%; a 2047 maturity was priced as 5s to yield 3.14%. A 2018 maturity was offered as a sealed bid while the 2057 maturity was not offered to retail.

The $100 million of Series 206 bonds subject to the alternative minimum tax were priced as 5s to yield from 2.64% in 2028 to 3.21% in 2037, 3.31% in 2042 and 3.36% in 2047.

The deal is rated Aa3 by Moody’s Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings.

Bank of America Merrill Lynch priced a $571.835 million composite bond issue for Wellstar, a Georgia non-profit healthcare system.

The Development Authority of Fulton County’s $179.69 million of hospital revenue bonds were priced to yield from 1.39% with a 3% coupon in 2019 to 3.51% with a 5% coupon in in 2037; a 2042 maturity was priced as 5s to yield 3.61% and a 2047 maturity was priced as 5s to yield 3.66%. A 2018 maturity was offered as a sealed bid.

The Cobb County Kennestone Hospital Authority’s $157.995 million of revenue anticipation certificates were priced to yield from 1.39% with a 5% coupon in 2019 to 3.51% with a 5% coupon in 2037; a 2042 maturity was priced as 5s to yield 3.61% and a 2047 maturity was priced as 5s to yield 3.66%. A 2018 maturity was offered as a sealed bid.

The Lagrange-Troup County Hospital Authority’s $62.69 million of revenue anticipation certificates were priced to yield from 1.39% with a 2% coupon in 2019 to 3.96% with a 3.875% coupon in 2037; a 2042 maturity was priced as 4s to yield 4.01% and a 2047 maturity was priced as 4s to yield 4.06%. A 2018 maturity was offered as a sealed bid.

The Griffin-Spalding County Hospital Authority’s $171.46 million of revenue anticipation certificates were priced to yield from 1.39% with a 3% coupon in 2019 to 3.51% with a 5% coupon in 2037; a 2042 maturity was priced as 4s to yield 4.01% and a 2047 maturity was priced as 3 3/4s to yield 4.10%. A 2018 maturity was offered as a sealed bid.

The deal is rated A2 by Moody’s and A by S&P

In the competitive arena, the Maryland Transportation Authority sold $164.3 million of Series 2017 tax-exempt transportation facilities projects revenue refunding bonds.

Wells Fargo Securities won the bonds with a true interest cost of 3.08%. The issue was priced to yield from 0.91% with a 5% coupon in 2018 to 3.50% at par in 2040.

The deal is rated Aa3 by Moody’s and AA-minus by S&P and Fitch.

In the negotiated sector, BAML is expected to price the state of Hawaii’s $251 million of Series 2017A taxable airport systems customer facility-charge revenue bonds on Wednesday. The deal is rated A2 by Moody’s, A-plus by S&P and A by Fitch.

Morgan Stanley is set to price the Chicago Transit Authority’s $230 million of refunding Series 2017 capital grant receipts revenue bonds on Wednesday. The deal is rated A by S&P and BBB by Fitch.

Since 2008, the Windy City’s transit authority has sold $4.87 billion of securities, with the lion's share of issuance coming in 2008 when it sold $2.44 billion. The authority did not come to market in 2009, 2012, 2013 or 2016. With Wednesday’s sale, the authority issued more this year than in the past two years combined.

Barclays Capital is expected to price the Massachusetts Port Authority’s $172.79 million of Series 2017A revenue bonds. The deal is rated Aa2 by Moody’s and AA by S&P and Fitch.

BAML is set to price the Health and Educational Facilities Board of the Metropolitan Government of Nashville and Davidson County, Tenn.'s $120.89 million of revenue bonds for Vanderbilt University for institutions on Wednesday after a one-day retail order period.

The bonds were priced for retail to yield from 4.10% with a 4% coupon in 2047 to 3.71% with a 5% coupon in 2048. The deal is rated A3 by Moody's.

Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar decreased $2.13 billion to $10.86 billion on Wednesday. The total is comprised of $3.64 billion of competitive sales and $7.21 billion of negotiated deals.

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Chip Barnett

Chip Barnett

Chip Barnett is a journalist with more than 40 years of experience. Barnett is currently Senior Market Reporter for The Bond Buyer.
Aaron Weitzman

Aaron Weitzman

Aaron Weitzman is a markets reporter for The Bond Buyer, focusing on the sell side of the municipal bond market.