California's $2.2 billion general obligation deal was met with strong demand from investors, prompting the underwriter to expedite retail pricing on Tuesday morning and move the institutional pricing to Tuesday afternoon from Wednesday.

Part of the reason to move up the deal was to accommodate traders in the Northeast who were bracing for a storm Wednesday.

“It had pretty decent amounts in orders and substantial demand from retail,” a New York trader said.

“The demand was strong enough and the situation allowed them to take advantage and push it up,” said another New York trader. “It looks like tomorrow is going to be a mess here in New York and they didn’t want the storm to impact demand from the institutional side.”

Other large deals, such as the $929.5 million Oklahoma Development Finance Authority health revenue bonds, were bumped by as much as 30 basis points, indicating strong investor appetite, the trader said.

“My hospital analyst loved it and apparently many others did as well,” said Robert Wimmel, head of the municipal fixed income team at BMO. “It is an improving a credit and the deal today was roughly 13 times oversubscribed and got about $123 billion in orders for a little under one billion in bonds.”

He said that the transaction was between 10 and 21 times oversubscribed, depending on the maturity. “The whole deal was bumped 18 to 25, but 20 on most maturities. We will get very little of our order as most everyone stayed on the bump.”

John Mousseau, executive vice president and director of fixed income at Cumberland Advisors, said the deal was cheap and there was a lot to like.

“The over/under we had in over-subscription was 23, and it was way over that,” he said. “The insured portion was priced not a lot cheaper than insured Puerto Rico (which has not paid investors anything
going on two years this summer), plus you get a dominant provider and a teaching hospital.”

Assured Guaranty insured $50 million of the taxable portion and $85 million of tax-exempt.

“This use of our insurance is another example of Assured Guaranty’s ability to help optimize the execution of large transactions to achieve a lower all-in cost for the issuer,” said Leigh Nader, managing director at Assured. “It also reflects institutional investors’ increased appreciation of the value of our guaranty.”

Since 2008, the Oklahoma DFA has issued $3.68 billion of securities, with the most before this year occurring in 2015 when it sold $464 million and the least in 2013 when it sold $80.1 million.

Wells Fargo Securities priced the Clear Creek Independent School District, Texas’ $155.22 million of Series 2018 unlimited tax school building bonds.

The deal, backed by the Permanent School Fund guarantee program, is rated triple-A by Moody’s and Fitch.

BOK Financial Securities priced the Lake Travis Independent School District, Texas’s $108.74 million of Series 2018A unlimited tax school building bonds. The deal is backed by PSF and rated AAA by S&P and Fitch.

In the competitive arena, Washington state sold $604.36 million of GOs in two sales.

Morgan Stanley won the $491.95 million of various purpose GOs with a true interest cost of 3.6019%.

Morgan Stanley also won the $112.41 million of motor vehicle fuel tax GOs with a TIC of 3.6092%.

Both deals are rated Aa1 by Moody’s, AA-plus by S&P and Fitch.

Ohio sold $300 million of higher education GOs. JPMorgan Securities won the bonds with a TIC of 3.4512%. The deal is rated Aa1 by Moody's and AA-plus by S&P and Fitch.

Citigroup won Hamilton County, Tenn.’s $170.95 million of GOs with a TIC of 2.6584%. The deal is rated triple-A by Moody’s, S&P and Fitch.

Links to Tuesday’s bond sales

California bonds:
https://assets.sourcemedia.com/13/78/7da73dea4393bc4cc6cd0053b939/califp-030618.doc

https://assets.sourcemedia.com/28/08/cc7c91ab48839a8c9ba4b9148a4d/calprice030618.doc

Okla. DFA bonds:
https://assets.sourcemedia.com/3c/4a/6951632643c0be2181e8d4d86b11/oklap030618.doc

Hamilton County, Tenn., bonds:
https://assets.sourcemedia.com/f3/ba/640e4fde4f5585464eee24ebba56/hamp2-030618.doc

https://assets.sourcemedia.com/37/c2/f582140d4f98a60360011011e09e/tennprice030618.doc

Clear Creek Independent School District, Texas, bonds:
https://assets.sourcemedia.com/4c/5e/e6b0b15f4064ad8d0155034c9b4c/clearrp-030618.doc

https://assets.sourcemedia.com/b5/5a/56a3ea3040c39b5f8bdc771fbade/clearpricing030618.doc

Washington bonds:
https://assets.sourcemedia.com/a7/ea/71d433f444989bfbab862c81eece/wash490p-030618.doc

https://assets.sourcemedia.com/0b/57/bd30d528464b8dd82374bcd4c850/wash112p-030618.doc

Ohio bonds:
https://assets.sourcemedia.com/1f/94/34f8969c4619b4964632321dfac8/ohioprice030618.doc

Lake Travis ISD, Texas, bonds:
https://assets.sourcemedia.com/db/1c/1e579ea347cfa01d035e873fb21b/laketravis030618.doc

NYC TFA plans $1.07B BARB sale
The New York City Transitional Finance Authority said Tuesday that it is planning to sell about $1.07 billion of tax-exempt and taxable building aid revenue bonds next week.

Proceeds from the BARB sale will be used to fund education capital projects and refund outstanding bonds.

The pricing of the $1 billion of tax-exempt fixed rate bonds is expected to take place on Wednesday, March 14, through TFA’s BARB underwriting syndicate led by book-running senior manager Jefferies, with Bank of America Merrill Lynch and Ramirez & Co. serving as co-senior managers. There will be a two-day retail order period on Monday, March 12 and Tuesday, March 13, 2018.

The TFA also intends to competitively sell $73 million of taxable fixed-rate bonds on Wednesday, March 14, 2018.

Bond Buyer 30-day visible supply at $12.07B
The Bond Buyer's 30-day visible supply calendar increased $596.4 million to $12.07 billion on Wednesday. The total is comprised of $5.64 billion of competitive sales and $6.43 billion of negotiated deals.

Secondary market
There was a balanced and steady tone in the municipal market on Tuesday afternoon, as buyers and sellers were active in the secondary market, the largest deal of the week made a strong arrival in the primary market, and overall ratios remained steady, according to the New York trader.

“The market is pretty well established between buyers and sellers and there are a reasonable amount of line items for sale and bid wanteds,” he said, referring to the market as orderly. “Trading accounts are willing to offer bonds at full offered side.”

“There has been a little bit of intraday volatility with Treasuries the last couple of days, but percentages are holding steady, the market is pretty even, and it doesn’t seem like anyone is that nervous,” the trader said.

Municipal yields have also been mostly unchanged since last week, as the 30-year generic triple-A scale tracked by Municipal Market Data was at 3.05% today, compared with Feb. 28 when it was 3.06% --which adds to the stability, he said.

“The market is not overwhelmingly good, but it’s not overwhelmingly bad,” adding that volume is helping maintain the market’s steady tone, he added. “If there was more supply there would be a little pressure on the market because people are net long."

Previous session's activity
The Municipal Securities Rulemaking Board reported 42,088 trades on Monday on volume of $9.08 billion.

California, New York and Texas were the states with the most trades, with the Golden State taking 14.804% of the market, the Empire State taking 13.251% and the Lone Star State taking 9.97%.

Treasury sells $65B 4-week bills
The Treasury Department Tuesday auctioned $65 billion of four-week bills at a 1.550% high yield, a price of 99.879444. The coupon equivalent was 1.573%. The bid-to-cover ratio was 3.01.

Tenders at the high rate were allotted 35.02%. The median rate was 1.520%. The low rate was 1.490%.

Gary 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 Vanessa Kim at 212-803-8474 for more information.

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Christine Albano

Christine Albano

Christine Albano is a reporter in the Investor’s & Investing beat, which she has covered for the past two decades. She has a wide range of buy side sources in the municipal market.
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.