Muni market offers treats on Halloween
Phoenix Civic Improvement Corp. repriced a sale of airport revenue bonds to lower costs and the Massachusetts Development Finance Agency brought a sale to institutional buyers a day early, taking advantage of a steady municipal bond market Tuesday.
Citigroup priced and repriced the Phoenix Civic Improvement Corp.’s $364.375 million of senior lien airport revenue and revenue refunding bonds, lowering yields between 3 and 8 basis points from the preliminary scale on Tuesday morning.
The $190.935 million of alternative minimum tax, series 2017A bonds were repriced to yield from 1.17% with a 5% coupon in 2018 to 3.14% with a 5% coupon in 2037. A term bond in 2042 was repriced to yield 3.21% with a 5% coupon and a term bond in 2047 was repriced to yield 3.29% with a 5% coupon.
The $173.440 million of non-AMT, series 2017B bonds were priced and repriced to yield from 1.33% with a 5% coupon in 2021 to 2.91% with a 5% coupon in 2038. The deal is rated Aa3 by Moody’s and AA-minus by S&P.
"The AMT series brought bonds with yields roughly between 25 and 27 basis points wider than their non-amt counterparts," said Greg Saulnier, research analyst at Municipal Market Data /TM3.
Morgan Stanley priced the Massachusetts DFA’s $248.995 million of revenue bonds for The Broad Institute for retail investors and accelerated the institutional pricing, which was originally scheduled for Wednesday.
The deal was priced for institutions to yield from 1.30% with a 3% coupon and a 5% coupon in split 2021 to 2.84% with a 5% coupon in 2037. A term bond in 2041 was priced to yield 3.30% with a 4% coupon.
The bonds were priced for retail to yield from 1.33% with 3% and 5% coupons in a split 2021 maturity to 3.10% with a 3% coupon in 2033. A term bond in 2041 was priced for retail to yield 3.35% with a 4% coupon. No retail was offered in the 2034 through 2037 maturities. The deal is rated Aa3 by Moody’s and AA-minus by S&P.
"From what I can tell, they got solid demand on the retail portion and wanted to jump right into institutional pricing," said one New York trader. "With the market today being buoyant, they didn't want to wait and risk it in case there was any turbulence tomorrow."
The Federal Open Market Committee is expected to take no action on interest rates when it concludes its meeting Wednesday. President Trump is expected to make his nomination to chair the Federal Reserve the next day.
Montgomery County, Md., competitively sold $684 million of general obligation bonds in four separate offerings.
JPMorgan won the $291.54 million of Series C consolidated public improvement refunding bonds of 2017 with a true interest cost of 2.07%. The bonds were priced to yield from 1.09% with a 5% coupon in 2019 to 2.90% with a 3% coupon in 2031.
Goldman Sachs won the $170 million of Series A consolidated public improvement bonds of 2017 with a TIC of 1.73%. The bonds were priced to yield from 1.02% with a 5% coupon in 2018 to 2.05% with a 5% coupon in 2027.
Wells Fargo won the $144.06 million of Series D 2019 crossover consolidated public improvement refunding bonds of 2017 with a TIC of 2.099%. The bonds were priced to yield from 1.37% with a 3% coupon in 2020 to 2.45% with a 4% coupon in 2029.
And JPMorgan won the $78.715 million of Series B consolidated public improvement refunding bonds of 2017 with a TIC of 1.63%. The deals are rated triple-A by Moody’s Investors Service, S&P Global Ratings and Fitch Ratings.
Siebert Cisneros Shank & Co. on Tuesday priced the Pennsylvania Turnpike Commission’s $396.475 million. The $151.445 million of second series of 2017 subordinate revenue refunding bonds were priced to yield from 2.90% with a 5% coupon in 2028 to 3.44% with a 5% coupon in 2037. This deal is rated A3 by Moody’s, A-minus by Fitch and A-plus by Kroll Bond Rating Agency.
The $245.03 million of second series of 2017 motor license fund-enhanced turnpike subordinate special revenue refunding bonds were priced to yield from 2.46% with a 5% coupon in 2026 to 3.27% with a 5% coupon in 2038. A term bond in 2041 was priced to yield 3.35% with a 5% coupon. This deal is rated A2 by Moody’s and AA-minus by Fitch and Kroll.
Bank of America Merrill Lynch priced Maryland Health and Higher Educational Facilities Authority’s $118.955 million of revenue bonds for LifeBridge Health. The bonds were priced to yield from 1.07% with a 4% coupon in 2018 to 3.54% with a 4% coupon in 2037. A term bond in 2042 was priced to yield 3.62% with a 4% coupon and a term bond in 2044 was priced to yield 3.30% with a 5% coupon. The deal is rated A1 by Moody’s and A-plus by S&P.
RBC Capital Markets priced San Marcos Unified School District, Calif.’s $115.7 million of general obligation, election of 2010 refunding bonds. The $5.255 million of 2010 election, Series D bonds were priced to yield from 1.05% with a 3% coupon in 2019 to 1.25% with a 4% coupon in 2021.
The $110.45 million of 2017 GO refunding bonds were priced to yield from 0.97% with a 2% coupon in 2018 to 3.27% with a 4% coupon in 2038. The deal is rated Aa3 by Moody’s and AA-minus by S&P.
Top-shelf municipal bonds finished Tuesday mostly unchanged, with the intermediate and long end of the curve was steady and the front end saw yields rise by as many as three basis points.
The yield on the 10-year benchmark muni general obligation was flat from 2.01% on Monday, while the 30-year GO yield was also unmoved from 2.83%, according to a final read of MMD`s triple-A scale.
U.S. Treasuries were mostly unchanged on Tuesday at the market close. The yield on the two-year Treasury nudged up to 1.59% from 1.58%, the 10-year Treasury yield was flat at 2.37% and yield on the 30-year Treasury bond was steady at 2.87%.
On Tuesday, the 10-year muni-to-Treasury ratio was calculated at 84.6% compared with 84.8% on Monday, while the 30-year muni-to-Treasury ratio stood at 98.4% versus 98.2%, according to MMD.
AP-MBIS 10-year muni at 2.335%, 30-year at 2.896%
The Associated Press-MBIS municipal non-callable 5% GO benchmark scale was mixed at the market close on Tuesday.
The 10-year muni benchmark yield dipped to 2.335% from the final read of 2.336% on Monday, according to Municipal Bond Information Services, a national consortium of municipal interdealer brokers. The AP-MBIS 30-year benchmark muni yield was flat at 2.896% from 2.896%.
The AP-MBIS benchmark index is a yield curve built on market data aggregated from MBIS member firms and is updated hourly on the Bond Buyer Data Workstation.
Data appearing in this article from Municipal Bond Information Services, including the AP-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.