New York City sold $950 million of general obligation bonds on Tuesday after retail buyers flocked to the deal as changes to the tax laws loomed in Washington. In secondary trading, yields on top-rated munis fell by as much as eight basis points.

Ramirez & Co. priced NYC’s Fiscal 2018 Series C and D GOs for institutions after holding a retail order period Monday and part of Tuesday that attracted what one source said was record breaking demand for the deal, which was originally sized at $850 million.

For institutions, the $884.29 million of Fiscal 2018 Series C GOs were priced to yield from 1.54% with 4% and 5% coupons in a split 2019 maturity to 2.84% with a 4% coupon in 2034. The $65.72 million of Fiscal 2018 Series D GOs were priced to yield from 1.25% with a 2% coupon in 2018 to 3.128% with a 3.10% coupon in 2035.

“We had an outstanding first day retail order period with over $800 million in orders, including oversubscription in multiple maturities,” said Devon Puglia, a spokesman for NYC Comptroller Scott Stringer. He added that the city saw so much “strong demand and strong feedback from institutions,” that it closed retail orders and moved to an institutional pricing earlier than expected.

The deal is rated Aa2 by Moody’s Investors Service and AA by S&P Global Ratings and Fitch Ratings.

Since 2007, NYC has sold nearly $50 billion of bonds, with the most issuance occurring in 2008 when it offered $6.69 billion. The city saw a low year of issuance in 2011 when it sold $2.69 billion of bonds.

“Munis are on fire right now and that NYC deal was gone before you knew it,” said one New York trader. “Deal was upped due to demand but retail took the majority of it, not leaving much for institutions.”

He said that concern that record volume would cheapen the market had given way to expectations that record volume is going to lead to plummeting volume next year. “The technicals never supported the weakening, in fact they supported strengthening as reinvestment flows more then matched the supply.”

Secondary market
The MBIS municipal non-callable 5% GO benchmark scale was stronger in late trading.

The 10-year muni benchmark yield fell to 2.301% on Tuesday from the final read of 2.334% on Monday, according to Municipal Bond Information Services. The MBIS 30-year benchmark muni yield decreased to 2.780% from 2.813%.

The MBIS benchmark index is updated hourly on the Bond Buyer Data Workstation.

Top-rated municipals finished stronger on Tuesday. The yield on the 10-year benchmark muni general obligation fell six basis points to 1.99% from 2.05% on Monday, while the 30-year GO yield dropped eight basis points to 2.58% from 2.66%, according to the final read of MMD’s triple-A scale.

U.S. Treasuries were mixed. The yield on the two-year Treasury rose to 1.82% from 1.81%, the 10-year Treasury yield fell to 2.36% from 2.38% and the yield on the 30-year Treasury decreased to 2.74% from 2.77%.

On Tuesday, the 10-year muni-to-Treasury ratio was calculated at 84.4% compared with 86.3% on Monday, while the 30-year muni-to-Treasury ratio stood at 94.3% versus 96.1%, according to MMD.

Primary market
“Muni supply in December may well break the record set in December 1985. And yet, Muni demand has been equal to the supply,” said one Northeast trader. “Both traditional buyers and crossover buyers have been present and active. Whether this demand remains strong for the whole month is a different question, but for right now prices are rising.”

In other action Tuesday, Jefferies priced Chicago’s Sales Tax Securitization Corp.’s $574.53 million of sales tax securitization bonds for retail investors.

The $174.56 million of Series 2017A tax-exempts were priced as 5s to yield from 1.83% in 2020 to 2.65% in 2030. The $399.97 million of Series 2017B taxables were priced to yield from about 100 basis points over the comparable Treasury security in 2031 to about 75 basis points over the comparable Treasury security in 2034 and about 100 basis points over the comparable Treasury security in 2043.

The deal is rated AA by S&P and AAA by Fitch and Kroll Bond Rating Agency.

Wells Fargo Securities price the Central Florida Expressway Authority’s $345.21 million of Series 2017 senior lien refunding revenue bonds. The issue was priced to yield from 1.24% with a 5% coupon in 2018 to 2.86% with a 5% coupon and 3.45% with a 3.375% coupon in a split 2042 maturity.

The deal is rated A1 by Moody’s and A-plus by S&P except for the 2034-2036 maturities and the second halves of split 2039 and 2042 maturities which are insured by Build America Mutual and rated AA by S&P.

Barclays Capital priced the Metropolitan St. Louis Sewer District, Mo.’s $317.77 million of Series 2017A wastewater system improvement and refunding revenue bonds for investors after holding a one-day retail order period.

The issue was priced to yield from 1.47% with a 3% coupon in 2019 to 2.60% with a 5% coupon in 2037. A 2042 maturity was priced as 5s to yield 2.62% and a 2047 maturity was priced as 5s to yield 2.69%.

The deal is rated Aa2 by Moody’s, AAA by S&P and AA-plus by Fitch.

“It seems like every deal that came today did well -- lots of paper to be put to work,” said another New York trader. “There is rampant activity in primary and secondary. There are not many sellers.”

Goldman Sachs priced the Sacramento Municipal Utility District, Calif.’s $217.67 million of Series 2017E electric revenue refunding bonds. The issue was priced as 5s to yield from 1.16% in 2018 to 2.01% in 2028.

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

Bank of America Merrill Lynch priced the Harris County, Texas, Cultural Education Facilities Finance Corp.’s $211.26 million of Series 2017 thermal utility revenue refunding bonds for the Teco project. The issue was priced to yield from 1.62% with a 5% coupon in 2019 to 3.18% with a 4% coupon in 2037.

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

RBC Capital Markets priced the Minnesota Housing Finance Agency’s $104.22 million of residential housing finance bonds.

The $41.15 million of Series 2017D bonds subject to the alternative minimum tax were priced at par to yield from 1.45% in 2018 to 3.10% and 3.15% in a split 2028 maturity, and 3.30% in 2030. The $63.08 million of Series 2017E non-AMT bonds were priced at par to yield 3.30$ in 2034 and as 4s to yield 2.31% in a 2048 planned amortization class bonds with an average life of 4.81 years.

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

JPMorgan Securities received the written award of King Co., Wash.’s $149.49 million of Series 2017 sewer refunding revenue bonds. The issue was priced as 5s to yield from 1.14% and 1.21% in a split 2018 maturity to 1.65% in 2021 and to yield from 2.45% in 2030 to 2.77% in 2037, 2.83% in 2042 and 2.91% in 2049.

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

Wells Fargo Securities received the written award on Richmond, Va.’s $118.54 million of Series 2017D GO public improvement refunding bonds. The issue was priced to yield from 1.19% with a 4% coupon in 2018 to 2.70% with a 5% coupon in 2033.

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

Goldman Sachs priced the California Department of Water Resources $288.89 million of Series AX water system revenue bonds for the Central Valley project. The issue was priced as 5s to yield from 1.19% in 2018 to 2.52% in 2035.

The deal is rated Aa1 by Moody’s and AAA by S&P.

Sources said Goldman was also offering indications of interest on the department’s $147.19 million of Series AY taxable water system revenue bonds, with yields ranging from about 30 basis points over the comparable Treasury security in 2019 to about 90 basis points over the comparable Treasury security in 2029.

Goldman also priced the Sacramento MUD’s $217 million of Series 2017E electric revenue refunding bonds. The issue was priced as 5s to yield from 1.16% in 2018 to 2.01% in 2028.

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

Citigroup priced the Lexington County, Ky., Health Services District. Inc.’s $146.51 million of Series 2017 hospital revenue refunding bonds. The issue was priced to yield from 1.37% with a 5% coupon in 2018 to 3.52% with a 4% coupon in 2036.

The deal is rated A1 by Moody’s and A-plus by S&P and Fitch.

In the competitive arena, Westchester County, N.Y., sold $178.89 million of GOs in three separate offerings. The $135.87 million of Series 2017A tax-exempt GOs were won by JPMorgan with a true interest cost of 1.92%. The bonds were priced to yield from 1.40% with a 5% coupon in 2019 to 2.17% with a 4% coupon in 2029.

The $19.93 million of Series 2017C tax-exempt GOs were won by JPMorgan with a TIC of 2.45%. The $23.09 million of Series 2017B taxable GOs were won by Bank of America Merrill Lynch with a TIC of 2.78%.

All three deals are rated Aa1 by Moody’s and AAA by S&P and Fitch.

Since 2007, Westchester County has issued roughly $1.35 billion of bonds, with the most issuance occurring in 2010 when it sold $258 million of bonds. The county did not come to market in 2008.

The Board of Education of the Alpine School District, Utah, sold $113.25 million of Series 2017B GO school building bonds under the Utah School Bond Guaranty program.

Citi won the bonds with a TIC of 2.548%. Pricing information was not available. The deal is rated triple-A by Moody’s and Fitch.

Bond Buyer 30-day visible supply at $21.7B
The Bond Buyer's 30-day visible supply calendar decreased $1.09 billion to $21.69 billion on Tuesday. The total is comprised of $5.53 billion of competitive sales and $16.16 billion of negotiated deals.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 41,532 trades on Monday on volume of $8.40 billion.

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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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.