Supply surges into muni market

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More municipal supply came to market on Tuesday, as buyers saw issuers coming in from the North to the South, with bonds to notes in the negotiated and competitive sectors.

Primary market
BofA Securities priced Atlanta, Georgia’s (Aa3/AA-/AA-) $686.35 million of airport general revenue bonds, consisting of Series 2019A bonds not subject to the alternative minimum tax, Series 2019B AMT bonds, Series 2019C non-AMT subordinate lien bonds and Series 2019D AMT subordinate lien bonds.

PNC Capital Markets, Ramirez & Co., Mesirow Financial, Rice Financial Products, Security Capital and UBS were co-managers. Frasca & Associates was the financial advisor; Hunton Andrews Kurth and the Kendall Law Firm were the bond counsel.

Since 2009, the city has sold about $8 billion of bonds, with the most issuance occurring in 2015, when it sold $1.49 billion. The city sold the least amount of bonds in 2016, when it issued $179.0 million.
In the competitive arena, Ohio (Aa1/AA+/AA+) sold $300 million of Series 2019A common schools GOs on Tuesday. Morgan Stanley won the bonds with a true interest cost of 2.3471%. PFM Financial Advisors was the financial advisor; Ice Miller and Squire Patton was the bond counsel. Proceeds will be used for capital facilities for common schools.

Massachusetts (Aa1/AA/AA+) sold $189.635 million of Series 2019E tax-exempt GO refunding bonds. Goldman Sachs won the bonds with a TIC of 1.2539%. Omnicap Group was the financial advisor; Locke Lord was the bond counsel. The bonds mature from 2020-2027, all 3s ranging from 1.03% in 2020 to 1.34% in 2027.

On Monday, BofA priced Massachusetts’ $858.435 million of taxable Series 2019D general obligation refunding bonds. The deal was originally sized at $441.23 million. On Tuesday, the Mass. 2.663% taxable GOs due 2039, originally priced at par, were trading at 101.933, a yield of 2.539%, in 27 trades totaling $127 million.

The Miami-Dade County School District, Florida, (MIG1/NR/NR) sold $400 million of Series 2019 tax anticipation notes. The TANs were won by four groups including Barclays Capital, Jefferies, JPMorgan Securities and Morgan Stanley. PFM Financial Advisors was the financial advisor; Greenberg Traurig was the bond counsel.

Essex County, N.J., (Aaa/NR/AA+) sold $124.48 million of Series 2019 GOs, Series 2019A general improvement bonds and Series 2019B county college bonds. Mesirow Financial won the deal with a TIC of 2.5511%. Acacia Financial Group was the financial advisor; Gibbons was the bond counsel. Proceeds will be used to finance County College improvements and bridge, culvert, drainage, road, zoo, park and building improvements.

Since 2009, the county has sold about $723 million of bonds with the most issuance occurring in 2016 when it sold $150 million. It sold the least amount of bonds in 2012 when it issued $2.5 million.

Henrico County, Virginia, (Aaa/AAA/AAA) sold $105.115 million of Series 2019 GO public improvement bonds. JPMorgan Securities won the bonds with a TIC of 1.9668%. PFM Financial Advisors was the financial advisor; Hawkins Delafield was the bond counsel. Proceeds will be used to finance various capital and school improvements. The gilt-edged county priced its deal with 5s from 2020-2031, yielding 1.00% in 2020 and 1.39% in 2031. The 2032s had a 4% coupon with a 1.60% yield and the rest of the deal were 3s from 2033-2039, with the 33s yielding 2.02% and the long bond at 2.36%.

Tuesday’s bond sales
Click here for the Atlanta pricing

Click here for the Ohio sale

Click here for the Miami-Dade sale

Click here for the Henrico County sale

Click here for the Mass. tax-exempt sale

Click here for the Mass. taxable award

Click here for the Mass. taxable pricing

Click here for the Mass. taxable launch

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

On Refinitiv Municipal Market Data’s AAA benchmark scale, the yield on the 10-year muni GOs dropped one basis point to 1.23% while the yield on the 30-year fell two basis points to hit its record low of 1.87% set on Aug. 14.

“Muni yields are a basis point or so better, for both high-yield and investment-grade, so far today on slightly higher volume,” ICE Data Services said in a Tuesday market comment.

The 10-year muni-to-Treasury ratio was calculated at 82.4% while the 30-year muni-to-Treasury ratio stood at 94.9%, according to MMD.

Treasuries were stronger as stocks remained volatile. The Treasury three-month was yielding 1.987%, the two-year was yielding 1.522%, the five-year was yielding 1.391%, the 10-year was yielding 1.484% and the 30-year was yielding 1.961%.
Previous session's activity
The MSRB reported 28,122 trades Monday on volume of $6.64 billion. The 30-day average trade summary showed on a par amount basis of $11.12 million that customers bought $5.82 million, customers sold $3.24 million and interdealer trades totaled $2.06 million.

California, Texas and New York were most traded, with the Golden State taking 16.464% of the market, the Lone Star State taking 16.344% and the Empire State taking 10.696%.

The most actively traded security on Monday was the Texas 2019 TRANs 4s of 2020, which traded 91 times on volume of $62.61 million. The TRANS, originally priced at 102.61 to yield 1.298%, were trading at a high price of 102.73, a low yield of 1.177%.

Treasury auctions notes
The Treasury Department Tuesday auctioned $40 billion of two-year notes with a 1 1/2% coupon at a 1.516% yield, a price of 99.968632. The bid-to-cover ratio was 2.60.

Tenders at the high yield were allotted 9.83%. The median yield was 1.489%. The low yield was 0.880%.

Treasury to sell $55B 4-week bills
The Treasury Department said it will sell $55 billion of four-week discount bills Thursday. There are currently $35.003 billion of four-week bills outstanding.

Treasury also said it will sell $40 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.

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Primary bond market Secondary bond market City of Atlanta, GA State of Ohio Commonwealth of Massachusetts State of Texas State of California State of New York Miami-Dade County School Board County of Essex, NJ
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