Retail investors lined up to get first crack at the New York City Transitional Finance Authority’s future tax secured subordinate bonds as underwriters opened a two-day order period.
Weekly bond volume is estimated to total $3.6 billion, consisting of $1.6 billion of negotiated deals and $2 billion of competitive sales. The NYC TFA tops the slate with its issue of more than $1.4 billion of future tax secured subordinate fiscal 2019 bonds.
On Tuesday, Loop Capital Markets opened the retail order period on the TFA’s $902.47 million of tax-exempt fixed-rate bonds ahead of the institutional pricing on Thursday.
The deal was warmly received as buyers snapped up the bonds, prompting the underwriter to curtail orders in the 2023, 2028 and 2029 maturities.
Additionally, the TFA is set to sell $500 million of taxable bonds in two competitive sales on
Thursday. The financial advisors are Public
Resources Advisory Group and
Group. Bond counsel are Norton Rose and
The deals are rated Aa1 by
Moody’s Investors Service and AAA by S&P Global Ratings and Fitch Ratings.
Proceeds will be used to fund capital projects, with the exception of proceeds from about $150 million of the tax-exempt fixed-rate bonds, which will be used to convert outstanding floating-rates into fixed-rates.
On Wednesday, Wells Fargo Securities is expected to price the University of Chicago’s $400 million of Series 2018C taxable fixed-rate bonds.
The corporate CUSIP deal is rated Aa2 by Moody’s, AA-minus by S&P and AAplus by Fitch. Municipal bonds were mostly weaker, according to a late read of the MBIS benchmark scale. Benchmark muni yields rose as much as two basis points in the four- to 30-year maturities and fell 12 basis points in the one-year maturity, six basis points in the two-year maturity and two basis points in the three-year maturity.
High-grade munis were mixed, with yields calculated on MBIS’ AAA scale rising as much as three basis points in three- to eight-year, 10- to 17-year and 24- to 30-year maturities, falling as much as a basis point in the one- and two-year, nine-year and 19- to 22-year maturities and remaining unchanged in the 18-year and 23-year maturities.
Municipals were weaker on Municipal Market Data’s AAA benchmark scale, which showed the yield on the 10-year muni general obligation rising two basis points while the yield on 30-year muni maturity increased one basis point.
Treasury bonds were weaker as stock prices traded slightly lower.
ACTIVELY TRADED ISSUES
Revenue bonds comprised 56.54% of total new issuance in the week ended Aug. 31, up from 56.53% in the prior week, according to Markit. General obligation bonds made up 38.13%, down from 38.15% while taxable bonds accounted for 5.33%, up from 5.32%.
Some of the most actively traded munis by type were from Puerto Rico and Texas issuers.
In the GO bond sector, the Puerto Rico 8s of 2035 traded 39 times. In the revenue bond sector, the Texas 4s of 2019 traded 238 times. And in the taxable bond sector, the Puerto Rico Sales Tax Financing Corp. 6.35s of 2039 traded 18 times.
The top municipal bond underwriters of last week included Morgan Stanley, Bank of America Merrill Lynch, Citigroup, Raymond James & Associates and Piper Jaffray, according to Thomson Reuters data.
In the week of Aug. 26 to Sept. 1, Morgan Stanley underwrote $1.0 billion, BAML $671.7 million, Citi $643.3 million, Raymond James $375.4 million and Piper Jaffray $352.4 million. ◽