Munis remained steady as a flurry of action on Tuesday gave the market a kick start, according to traders.
Primary Market
Bank of America Merrill Lynch won Pennsylvania's $1.21 billion of general obligation bonds with a true interest cost of 2.75%. The bonds were priced to yield from 0.67% with a 5% coupon in 2017 to 3.101% with a 3% coupon in 2036.The second series of 2016 GO bonds are rated Aa3 by Moody's Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings, with the exception of the $80.270 million 2033 maturity, which is insured by Assured Guaranty.
Since 2006, the Keystone State has issued $16.51 billion of securities, with the largest issuance coming in 2010 when it sold $2.69 billion. Tuesday's sale will put the state over $2 billion for the year, the second consecutive year it has issued that much. The state has only issued less than $1 billion in a year three times in past decade: in 2008, 2011 and 2014.
Also in the competitive arena, the Louisville/Jefferson County Metropolitan Sewer District sold $150 million. The sewer and drainage system revenue bonds were won by Wells Fargo with a TIC of 3.18%. The bonds were priced to yield from 0.65% with a 5% coupon in 2018 to 3.15% with a 3% coupon in 2043. A term bond in 2046 was priced to yield 3.18% with a 3% coupon and a term bond in 2047 was priced to yield 3.20% with a 3% coupon.
In the negotiated sector on Tuesday, Raymond James priced the Fort Worth Independent School District, Texas' $382.525 million of unlimited tax refunding and school building bonds. The bonds were priced to yield from 0.58% with a 5% coupon in 2018 to 2.66% with a 4% coupon in 2039. A term bond in 2041 was priced to yield 2.68% with a 4% coupon. The 2017 maturity was offered as a sealed bid. The deal, which is backed by the permanent school fund guarantee program, is rated triple-A by Moody's and S&P.
Robert W. Baird & Co. priced the state of Hawaii's $204.835 million of highway revenue bonds. The $103.550 million of series 2016A bonds were priced to yield from 0.52% with a 3% coupon in 2018 to 2.55% with a 4% coupon in 2036. The 2017 maturity was offered as sealed bid.
The $101.285 million of series 2016B bonds were priced to yield from 0.90% with a 4% coupon in 2021 to 1.99% with a 5% coupon in 2030. The 2017 maturity was offered as a sealed bid. The deal is rated Aa2 by Moody's, AA-plus by S&P and AA by Fitch.
Siebert, Brandford Shank & Co. priced the Bexar County Hospital District, Texas's $201.165 million of limited tax refunding bonds. The bonds were priced to yield 0.40% with a 1.50% coupon in 2017 and from 0.72% with a 4% coupon in 2019 to 3.06% with a 3% coupon in 2037. The deal is rated Aa1 by Moody's and AA-plus by S&P and Fitch.
Citi priced the Lexington County Health Services District, S.C.'s $176.58 million of hospital revenue bonds, which were priced to yield from 3.09% with a 3% coupon in 2033 to 2.68% with a 5% coupon in 2037. A term bond in 2041 was priced to yield 2.73% with a 5% coupon and term bond in 2046 was priced to yield 3.07% with a 4% coupon and 2.77% with a 5% coupon in a split maturity. The deal is rated A1 by Moody's, AA-minus by S&P and A-plus by Fitch.
Wells Fargo priced the County of Will, Ill.'s $175 million of GO bonds. The bonds were priced to yield from 0.66% with a 3% coupon in 2017 to 0.77% with a 4% coupon in 2018. The bonds were also priced to yield from 1.88% with a 5% coupon in 2026 to 2.80% with a 4% coupon in 2036. A term bond in 2041 was priced to yield 2.62% with a 5% coupon and a term bond in 2045 was priced to yield 2.65% with a 5% coupon. The deal is rated Aa1 by Moody's and AA-plus by S&P.
Retail investors were also in on the action, as Barclays Capital Markets held a retail order period for the Regents of the University of California Medical Center's $1.05 billion of Series 2016L bonds and Series 2016M taxables. The deal, which will be priced for institutions on Wednesday, is rated Aa3 by Moody's and AA-minus by S&P.
Secondary Market
Treasuries were mostly stronger on Tuesday around midday. The yield on the two-year Treasury was flat at 0.72% on Monday, the 10-year Treasury yield was down to 1.56% from 1.59% and the yield on the 30-year Treasury bond decreased to 2.27% from 2.30%.
Munis were steady from Monday's close. The yield on the 10-year benchmark muni general obligation held at 1.45%, while the yield on the 30-year muni was flat at 2.18%, according to a read of Municipal Market Data's triple-A scale.
On Monday, the 10-year muni to Treasury ratio was calculated at 91.7% compared to 91.1% on Friday, while the 30-year muni to Treasury ratio stood at 94.9% versus 94.0%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 29,442 trades on Monday on volume of $8.139 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $390.7 million to $11.77 billion on Tuesday. The total is comprised of $3.86 billion of competitive sales and $7.91 billion of negotiated deals.
