Top-quality municipal bonds were steady to stronger at mid-session, traders said, as the first of the week's $5.5 billion of new supply started to come to market.
But one deal the market won't be seeing is what would have been the biggest negotiated sale of the week – the Texas Transportation Commission's $615.26 million of Series 2016A fixed-rate state highway fund first tier revenue bonds and $90 million of Series 2016B state highway fund first tier revenue refunding put bonds.
The deal is being postponed until early October, Morgan Stanley, the underwriter on one of the deals confirmed.
Primary Market
In the negotiated sector on Wednesday, Wells Fargo Securities priced Austin, Texas' $187.43 million of Series 2016 public improvement and refunding bonds, Series 2016 certificates of obligation and Series 2016 public property finance contractual obligations.
The $108.81 million of Series 2016 public improvement and refunding bonds were priced to yield from 0.77% with a 5% coupon in 2018 to 2.24% with a 5% coupon in 2036. A 2017 maturity was offered as a sealed bid.
The $53.55 million of Series 2016 certificates of obligation were priced to yield from 0.77% in 2018 with a 5% coupon to 2.24% with a 5% coupon in 2036. A 2017 maturity was offered as a sealed bid.
The $25.07 million of Series 2016 public property finance contractual obligations were priced to yield from 0.74% with a 5% coupon in 2018 to 1.30% with a 5% coupon and 1.35% with a 4% coupon in a split 2023 maturity. A split 2017 maturity was offered as a sealed bid.
The deal is rated triple-A by Moody's Investors Service, S&P Global Ratings and Fitch Ratings and carries stable outlooks from all three agencies.
Since 2006, Austin has sold about $6.95 billion of debt, with the largest issuance occurring in 2015 when it sold about $1 billion of bonds. In the same period, the lowest amount it has issued in a year was in 2007, when it came to market with $287 million.
In the competitive arena, Washington state sold about $225 million of motor vehicle future tax general obligation bonds in two separate offerings.
Citigroup won the $134.38 million of Series 2017B GOs with a true interest cost of 2.9969%. The issue is dated Sept. 20, due Aug. 1 with a first coupon of Feb. 1, 2017. The bonds were priced as 5s to yield from 0.64% in 2017 to 2.33% in 2041.
Citi also won the $90.095 million of Series 2017C GO SR 520 Corridor program toll revenue bonds with a TIC of 3.0055%. The deals are rated Aa1 by Moody's and AA-plus by S&P and Fitch.
On Thursday, Bank of America Merrill Lynch is set to price the California's Health Facilities Financing Authority's $306 million of revenue bonds for Providence St. Joseph Health. The deal is rated Aa3 by Moody's and AA-minus by S&P and Fitch.
In the competitive arena on Thursday, the Dormitory Authority of the State of New York is slated to sell five competitive issues totaling roughly $704.68 million. The DASNY deals are rated Aa1 by Moody's and triple-A by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.24 billion to $15.01 billion on Wednesday. The total is comprised of $4.50 billion of competitive sales and $10.51 billion of negotiated deals.
Secondary Market
The yield on the 10-year benchmark muni general obligation was unchanged from 1.44% on Tuesday, while the yield on the 30-year fell one basis point from 2.13%, according to a read of Municipal Market Data's triple-A scale.
Treasuries were flat on Wednesday. The yield on the two-year Treasury was unchanged from 0.73% on Tuesday, the 10-year Treasury yield was flat at 1.54% and the yield on the 30-year Treasury bond was also unchanged at 2.23%.
On Tuesday, the 10-year muni to Treasury ratio was calculated at 93.5% compared to 90.9% on Friday, while the 30-year muni to Treasury ratio stood at 95.1% versus 94.3%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 33,008 trades on Tuesday on volume of $6.78 billion.
