Prices of top-rated municipal bonds were stronger at mid-session, traders said, with yields on some maturities down by as much as two basis points.
In the primary, the state of New York and the city of Boston sold deals in the competitive arena while Barclays Capital priced a University of California Regents' offering for retail investors and RBC Capital Markets priced a New York City deal for retail.
Primary Market
Barclay's priced the UC's $788.52 million of tax-exempt Series AO general revenue bonds for retail investors with Stifel as co-manager. The bonds were priced from 0.64% in a split 2017 maturity with 2% and 5% coupons to 3.60% with a 3.5% coupon in 2035; a 2040 term bond was priced as 5s to yield 3.30% and a 2042 term was priced as 3 5/8s to yield 3.80%. The 2016 maturity was offered as a sealed bid and there were no retail orders taken for the 2027-2029 and 2031-2033 maturities.
The bonds are rated Aa2 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings.
Since 2005, UC Regents has issued about $21.5 billion of revenue bonds. The largest issuances came in 2013 and 2009 when $4.7 billion and $2.7 billion were sold, respectively. The lowest issuances occurred in 2008 and 2014, when $572 million and $970 million were sold, respectively.
RBC priced New York City's $799.94 million Fiscal 2015 Series C and D general obligation bonds for retail investors.
The NYC $670.8 million Series C bonds were priced to yield from 0.74% with a 4% coupon in 2017 to 3.65% with a 3.625% coupon in 2035; a 2016 maturity was offered as a sealed bid. The NYC $129.14 million Series D bonds were priced to yield from 0.74% with a 2% coupon in 2017 to 3.61% with a 3.60% coupon in 2034; the 2015 and 2016 maturities were offered as sealed bids. The deal is rated Aa2 by Moody's and AA by S&P and Fitch.
Also on Tuesday, Citigroup Global Markets priced the Rhode Island Tobacco Settlement Finance Corp.'s $621.2 million of asset-backed bonds. The $14.76 million Series 2015A taxable were offered in 2015 and 2016 as sealed bids. The bonds are rated A by S&P and triple-B-plus by Fitch. The $317.55 million Series 2015A tobacco settlement asset-backeds were priced to yield from 0.46% with a 3% coupon in 2016 to 3.83% with a 5% coupon in 2030; a 2035 term was priced as 5s to yield 4.215% and a 2040 term was priced as 5s to yield 4.375%. The bonds are rated A by S&P and triple-B-plus by Fitch except for the 2026-2020 and 2035 maturities which are rated A-minus by S&P and the 2040 maturity which is rated triple-B-plus by S&P. The $288.89 million Series 2015B were priced at par to yield 2.25% in 2041, as 4 1/2s to yield 4.625% in 2045 and as 5s to yield 4.80% in 2050. The bonds are not rated.
In the competitive arena, New York State sold about $330 million of tax-exempt, taxable and tax-exempt refunding general obligation bonds in three separate competitive sales. The bonds are rated Aa1 by Moody's and AA-plus by S&P, Fitch and Kroll Bond Rating Agency.
The NYS $142.49 million Series 2015A tax-exempt general obligation bonds were won by Citigroup Global Markets with a true interest cost of 2.8499%.The bonds were priced to yield from 0.20% with a 4% coupon in 2016 to 3.35% with a 3.25% coupon in 2036; a 2040 term bond was priced as 3 1/4s to yield 3.50% and a 2045 term was priced as 3 1/4s to yield 3.50%.
The NYS $5.65 million Series 2015B taxable GOs were won by Roosevelt & Cross with a TIC of 2.3695%. No other information was immediately available.
The NYS $182.01 million Series 2015C tax-exempt GO refunding bonds were won by Morgan Stanley with a TIC of 1.7437%. No other information was immediately available.
The last time NYS sold tax-exempt GOs was on March 17, 2013, when Morgan Stanley won $170.69 million Series 2013C tax-exempt GO refunding bonds with a TIC of 1.5549%. The last time NYS sold taxable bonds was on Dec. 6, 2011, when Robert W. Baird won $30.91 million Series 2011F taxable GOs with a TIC of 2.3106%.
Boston sold $270 million of GO and GO refunding bonds in two separate offerings. The bonds are rated triple-A by Moody's and S&P.
Morgan Stanley won Boston's $140 million Series 2015A GOs with a TIC of 2.6912%. No other information was immediately available. J.P. Morgan Securities won Boston's $130 million Series 2015B GO refunding bonds with a TIC of 2.2351%. No other information was immediately available.
The last time Boston sold GOs was on March 12, 2014, when Bank of America Merrill Lynch won the $153 million 2014 Series A GOs with a TIC of 2.8643%.
Secondary Market
Prices of top-quality munis were unchanged to stronger at midday. The yield on the 10-year benchmark muni general obligation was unchanged from 2.18% on Monday, while the yield on 30-year GO was off as much as two basis points from 3.02%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were higher on Tuesday. The yield on the two-year Treasury note fell to 0.69% from 0.70% on Monday, while the 10-year yield decreased to 2.14% from 2.20% and the 30-year yield dropped to 2.74% from 2.80%.
On Monday, the 10-year muni to Treasury ratio was calculated at 99.4% versus 97.3% on Friday, while the 30-year muni to Treasury ratio stood at 107.9% compared to 106.7%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.029 billion to $16.187 billion on Tuesday. The total is comprised of $3.268 billion competitive sales and $12.920 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 35,802 trades on Monday on volume of $6.278 billion.
Most active on Monday, based on the number of trades, was the Pima County Industrial Development Authority, Ariz., education facility revenue bonds for the Lehman Academy of Excellence Series 2015 6 1/2s of 2045, which traded 245 times at an average price of par with an average yield of 6.5%; (initial offering price of 100.00/initial offering yield of yield of 6.5%).
