The New York City Transitional Finance Authority's $850 million deal was oversubscribed in institutional pricing after two days of retail order that traders described as "rough."
The TFA wrote in a press release that during the bonds received about $889 million of priority orders on the approximately $608 million bonds offered to them.
Investors said the deal's institutional success was also shown through the deal team's ability to lower yields on the 2042 maturity on the $700 million portion of the deal. Yields were lowered one basis point for the 2042 bonds to 3.72% for those with a 4% coupon and 3.46% for those that had a 5% coupon.
"They were marketed for institutional anyways," a trader on the west coast said. "The sell-off this week really threw [the TFA] for a loop though. The retail orders might have gone a lot better if the market had been flat to strengthening."
The TFA held two days of retail order for the $700 million part of the deal, and raised yields from Monday to Tuesday to follow the sell-off, according to a spokeswoman for the TFA. Many investors speculated that the underwriters actually increased yields because retail investors weren't interested in the 5% coupon bonds.
The press release said the TFA received around $92 million of orders over the two retail order days.
Morgan Stanley won the bid for the $150 million taxable part of the deal. The TFA received 10 bids for that sale, according to the press release.
The final pricing for the $700 part of the deal was done by Barclays Capital with yields ranging from 0.34% with a 4% coupon in 2016 to 3.46% with a 5% coupon in 2043.
There are sinking funds on 2039 and 2042 term bonds.
The $150 million portion were priced at par with a 1.88% coupon in 2018 to a 3.34% coupon in 2026.
The bonds were rated Aa1 by Moody's Investors Service and triple-A by Standard & Poor's and Fitch Ratings.
Primary:
A second wave of Cerritos Community College District general obligation bonds priced by RBC Capital Markets hit the market after the District sold $100 million of Tuesday priced by Wells Fargo.
RBC priced $80.4 million of the bonds, all tax-exempt. Yields ranged from 0.12% with a 2% coupon in 2015 to 3.43% with a 4% coupon in 2033.
The bonds can be called in 2024 and are rated Aa2 by Moody's and AA by S&P.
Bank of America Merrill Lynch priced $360.9 million of Missouri Health and Education Facilities Authority revenue bonds with yields from 3.80% with a 3.50% coupon in 2031 to 4.43% with a 4.25% coupon in 2048.
There are sinking funds on 2034, 2038, two 2045, and 2048 term bonds, and all the bonds can be called at par.
The bonds are rated Aa3 by Moody's and AA-minus by S&P. Both rating agencies have a negative outlook on the issuer.
Wells Fargo won the bid for the $299.86 million North Carolina limited obligation refunding bonds that it sold with yields from 0.25% with a 2% coupon in 2015 to 3.10% with a 3% coupon in 2028.
The bonds have an optional par call in 2024 and are rated Aa1 by Moody's, and AA-plus by S&P and Fitch.
The Nebraska Public Power District issued bonds with yields from 0.25% with a 2% coupon in 2015 to 3.20% with a 5% coupon in 2034.
JP Morgan was the managing underwriter, and the bonds earned ratings of A1 from Moody's, A from S&P and A-plus from Fitch.
Goldman priced $150 million of Hawaii Department of Business, Economic Development and Tourism green energy market securitization bonds that are taxable with yields on the first $50 million part at par with a 1.467% coupon in 2022.
There is a sinking fund on the 2022 term bond.
The second $100 million portion was also priced at par with a 3.242% coupon in 2031. It has a sinking fund on the 2031 term bond.
None of the bonds are callable. They earned triple-A ratings from the major rating agencies.
Scales:
The municipal market's sell-off continued on Wednesday with the yield on bonds maturing in six years increasing by one basis points, according to Municipal Market Data's triple-A scale. Yields increased by two basis points on bonds maturing in seven to 10 years, by three for 11- to 22-year maturities, and by two basis points for 23- to 30-year maturities.
Treasuries were mixed, with the two-year note's yield rising by one basis point to 0.53% from market close on Tuesday. The 30-year's yield also grew by one basis point, to 3.06%, while the 10-year's yield declined by one basis point to 2.34%.
