NYC Waters priced for retail, while San Jose, Clark County sell bonds

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The municipal bond market on Tuesday was treated to variety of new issues, in offerings from East and West Coasts that ranged from a deal that appealed to retail buyers and sales coming from an infrequent issuer.

Primary market
Barclays Capital priced for retail the New York City Municipal Water Finance Authority’s (Aa1/AA+/AA+) $400 million of tax-exempt fixed-rate second general resolution revenue bonds. The deal will be priced for institutions on Wednesday.

BofA Securities priced the Broward County School Board, Florida’s (Aa3/NR/A+) $170.775 million Series 2019A and Series 2019B certificates of participation.

In the competitive arena, San Jose, California, (Aa1/AA+/AA+) sold $502.26 million of general obligation bonds in three offerings.

Citigroup won the $173.4 million of Series 2019A-1 disaster preparedness, public safety and infrastructure GOs with a true interest cost of 3.4968%.

Morgan Stanley won the $170.37 million of Series 2019B taxable GOs with a TIC of 2.3077%.

And Jefferies won the $158.49 million of Series 2019C refunding, libraries, parks and public safety project GOs with a TIC of 2.1206%.

The financial advisor is Public Resources Advisory Group. The bond counsel is Jones Hall.

San Jose is not a frequent issuer. Since 2009, the city has sold about $1.5 billion of bonds, with the most issuance occurring in 2017 when it offered $624.3 million. It did not come to market in 20012, 2013, 2016 or 2018.
New Mexico sold $141.795 million of Series 2019 capital projects GOs.

JPMorgan won the bonds with a TIC of 1.4556%.

Proceeds will be used to pay for senior citizen facility improvements and acquisitions, library acquisitions, the purchase of school buses and for capital improvements and acquisitions at institutions of higher education, state special schools and tribal schools.

Fiscal Strategies Group and Public Resources Advisory Group are the financial advisors. Rodey, Dickason and Sherman & Howard are the bond counsel.

Clark County, Nevada, (Aa1/AA+/NR) sold $204.835 million of Series 2019 limited tax GO detention center bonds additionally pledged revenue in two sales.

JPMorgan Securities won the $190.915 million issue with a TIC of 2.5686% and also won the $13.92 million of Series 2019B limited tax GO regional justice center bonds additionally secured by administrative assessment pledged revenues with a TIC of 2.5951%.

Proceeds of the Series 2019 bonds will be used to refund the county’s Series 2018B subordinate revenue notes while proceeds of the Series 2019B bonds will be used to refund the county’s Series 2018A subordinate revenue notes.

Hobbs, Ong & Associates and PFM Financial Advisors are the financial advisors. Sherman & Howard is the bond counsel.

On Wednesday, Citigroup is expected to price the Massachusetts Port Authority’s (Aa2/AA/AA) $461.215 million of Series 2019B revenue bonds not subject to the alternative minimum tax and Series 2019C AMT bonds. Proceeds will be used for Logan Airport and for port facilities.

BofA Securities and Loop Capital Markets are co-managers on the deal, while PFM is the municipal advisor. Kaplan Kirsch Rockwell and Foley & Lardner are the bond counsel.

On Thursday, Barclays is set to price the Trustees of the California State University’s (Aa2/AA-/NR) $543.72 million of revenue bonds. Barclays Capital will price the Series 2018A and taxable Series 2019B bonds.

Tuesday’s bond sales

Click here for the NYC MWFA retail pricing

Click here for the Broward County sale

Click here for the San Jose $173M sale

Click here for the San Jose $170M sale

Click here for the Clark County sale

Click here for the New Mexico sale

Secondary market
Munis were stronger in late trade on the MBIS benchmark scale, with yields falling one basis point in the 10-maturing and by less than one basis point in the 30-year maturity. High-grades were mixed, with MBIS’ AAA scale showing yields falling less than one basis point in the 10-year maturity and rising by less than one basis point in the 30-year maturity.

On Refinitiv Municipal Market Data’s AAA benchmark scale, the yield on both the 10- and 30-year GOs fell one basis point to 1.61% and 2.28%, respectively.

"The market awaits Fed Chairman Jerome Powell’s Congressional testimony scheduled for Wednesday," ICE Data Services said in a market comment. "The ICE muni yield curve is down one to two basis points. Tobaccos are quiet and unchanged. High-yield is one basis point lower. Taxables are up about one basis point for the seven-year and longer maturities. Puerto Rico is hovering around yesterday’s levels."

The 10-year muni-to-Treasury ratio was calculated at 76.9% while the 30-year muni-to-Treasury ratio stood at 89.2%, according to MMD.

Treasuries were slightly weaker as stocks traded mixed. The Treasury three-month was yielding 2.251%, the two-year was yielding 1.892%, the five-year was yielding 1.862%, the 10-year was yielding 2.051% and the 30-year was yielding 2.532%.
Previous session's activity
The MSRB reported 34,705 trades Monday on volume of $7.48 billion. The 30-day average trade summary showed on a par amount basis of $11.58 million that customers bought $6.16 million, customers sold $3.50 million and interdealer trades totaled $1.93 million.

California, New York and Texas were most traded, with the Golden State taking 15.839% of the market, the Empire State taking 10.926% and the Lone Star State taking 10.236%.

The most actively traded security was the Puerto Rico Series 2014A GO 8s of 2035, which traded 14 times on volume of $46.0 million.

Treasury sells notes
The Treasury Department auctioned $38 billion of three-year notes with a 1 3/4% coupon at a 1.857% high yield, a price of 99.689179. The bid-to-cover ratio was 2.39.

Tenders at the high yield were allotted 45.35%. All competitive tenders at lower yields were accepted in full. The median yield was 1.821%. The low yield was 1.700%.

Treasury to sell $35B 4-week bills
Treasury said it will sell $35 billion of four-week discount bills Thursday. There are currently $35.000 billion of four-week bills outstanding.

Treasury also said it will sell $35 billion of eight-week bills Thursday.

Gary E. Siegel contributed to this report.

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 Ziad Saba at 212-803-6079 for more information.

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Primary bond market Secondary bond market New York City Municipal Water Finance Authority State of New York School Board of Broward County, FL City of San Jose, CA State of New Mexico Clark County Nevada Massachusetts Port Authority California State University Trustees