Pennsylvania competitively sold $990.55 million of unlimited tax general obligation bonds and retail investors were offered first crack at tax-exempts issued for New York University.
In secondary market trading, top quality municipal bonds were flat at mid-session, traders said.
Citigroup won the Keystone State's GOs with a true interest cost of 2.58%.
The $355 million of First Series of 2016 GOs were priced to yield from 0.68% with a 5% coupon in 2017 to approximately 3.229% with a 3.125% coupon in 2036. The 2025 and 2034-2046 maturities are insured by Assured Guaranty Municipal.
The $635.55 million of First Refunding Series of 2016 GOs were priced as 5s to yield from 0.70% in 2016 to 2.50% in 2027.
The Pennsylvania bonds are rated Aa3 by Moody's Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings.
Public Financial Management is the financial advisor on the sale and Ballard Spahr is bond counsel.
The Keystone State sold two competitive offerings in 2015 totaling over $2 billion. On May 27, Bank of America Merrill Lynch won $1.24 billion of Series of 2015 GOs with a true interest cost of 3.59%. On Feb. 3, BAML won $1 billion of First Series of 2015 GOs with a TIC of 2.99%.
Since 2006, the state has sold about $15 billion of debt, with the most issuance occurring in 2010 when it issued $2.69 billion and the least issuance coming in 2008 when it sold $705.2 million.
The bonds are rated Aa3 by Moody's and AA-minus by S&P and Fitch.
The Dormitory Authority of the State of New York is coming to market with two separate negotiated deals totaling about $810 million for New York University.
Morgan Stanley priced DASNY's $564.98 million of Series 2016A tax-exempt NYU revenue bonds for retail investors ahead of the institutional pricing on Thursday.
The issue was priced for retail to yield from 1.20% with a 4% coupon in 2021 to 2.53% with a 5% coupon in 2036; a 2039 term bond was priced as 5s to yield 2.61%, a 2041 step-coupon bond was priced at par to yield 2.125%, and a 2043 term was priced as 4s to yield 2.97%.
The bonds are rated Aa3 by Moody's and AA-minus by S&P.
On Thursday, Wells Fargo Securities will price DASNY's $246.38 million of Series 2016B taxable revenue bonds for NYU.
On Wednesday, Goldman Sachs is set to price the Illinois Finance Authority's $134.24 million of revenue refunding bonds for the Northwest Community hospital. The deal is rated A2 by Moody's and A-plus by S&P.
Also on Wednesday, RBC Capital Markets is expected to price Pima County, Ariz.'s $125.53 million of GO refunding bonds. The deal is rated AA-minus by S&P and Fitch.
And Morgan Stanley is set to price the Dauphin County General Authority, Pa.'s $100 million of Series 2016A health system revenue bonds for the Pinnacle Health System on Wednesday.
On Thursday, Citigroup is scheduled to price El Paso, Texas' $251 million of GO and combination tax and revenue bonds. The deal is rated AA by S&P and Fitch.
BAML is expected to price the Rhode Island Commerce Corp.'s $229 million of R.I. Department of Transportation's Series 2016A grant anticipation refunding bonds. The bonds are rated A2 by Moody's and AA-minus by S&P.
Barclays Capital is set to price the Sacramento Municipal Utility District, Calif.'s $149.48 million of Series 2016D tax-exempt electric revenue refunding bonds in Thursday. The deal is rated Aa2 by Moody's and AA-minus by S&P and Fitch.
Citi is expected to price the Board of Trustees of Oakland University, Mich.'s $112 million of general revenue bonds on Thursday. The deal is rated A1 by Moody's.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.99 billion to $12.25 billion on Wednesday. The total is comprised of $7.55 billion of competitive sales and $4.70 billion of negotiated deals.
Ramirez: Manageable Supply for the Week
"We think the new issue supply, at $4.7 billion, or 54% of the 12 week moving average, is manageable, led by $836 million NYU revs and $990 million Pa. GO deal, selling competitively. We think Pa. should come cheaper," Ramirez & Co. Managing Director Peter Block wrote in a research note released on Tuesday.
Ramirez continues to see net negative issuance for the year.
"We forecast gross supply at $378 billion in 2016 and continued negative net issuance. Gross supply through April 2016 was $120.38 billion, while net supply was $12.30 billion. We see net muni market supply at -$16.31 billion over the next 30 days, a reversal of the year-to-date trend."
Block highlighted several states that would see shrinking supply.
"Of the 10 states with the most outstanding debt, New York stands to shrink the most (1.5%), followed by New Jersey (1.3%), and Ohio (1.0%)," Block wrote. "Conversely, Washington is set to expand the most (1.1%), followed by Texas (0.3%).
Secondary Market
The yield on 10-year benchmark muni general obligation on Tuesday was unchanged from 1.66% on Thursday, while the 30-year muni yield was flat at 2.45%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were narrowly mixed on Wednesday. The yield on the two-year Treasury rose to 0.89% from 0.87% on Tuesday, while the 10-year Treasury yield dropped to 1.83% from 1.84% and the yield on the 30-year Treasury bond decreased to 2.61% from 2.63%.
The 10-year muni to Treasury ratio was calculated at 90.6% on Tuesday compared to 90.5% on Friday, while the 30-year muni to Treasury ratio stood at 93.2% versus 92.8%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 33,547 trades on Tuesday on volume of $6.54 billion.
