New Jersey Transportation Deal Increased to Meet Demand
Good investor demand met the the new deals that priced in the primary on Wednesday even as munis remained mostly weaker.
Wells Fargo Securities priced and repriced and restructured the New Jersey Transportation Trust Fund Authority’s $750 million of Series 2019AA transportation program bonds.
Buyer interest prompted the deal to be increased in size from the original $500 million issue.
“Demand was good on the long end, allowing them to upsize,” said one source who participated in the deal.
The deal is rated Baa1 by Moody’s Investors Service, BBB-plus by S&P Global Ratings, and A-minus by Fitch Ratings and Kroll Bond Rating Agency. All four rating agencies assign stable outlooks to the credit.
Since 2009, the authority has sold about $16 billion of bonds with the most issuance occurring in 2018 when it issued
$2.76 billion. It did not come to market in 2017.
Sachs priced the
$348.22 million composite issue.
Citigroup priced the Indiana Finance Authority’s $212.23 million of Series 2019A state revolving fund program green bonds.
The deal is rated triple-A by Moody’s, S&P and Fitch; all three agencies assign stable outlooks to the credit.
In the competitive sector, Citi won the Florida Department of Transportation’s $224.17 million of Series 2019A turn- pike revenue refunding bonds.
The deal is rated Aa2 by Moody’s and AA by S&P and Fitch.
On Thursday, JPMorgan Securities is expected to price the San Francisco Airport Commission’s $1.78 billion of tax-exempt and taxable revenue and revenue refunding bonds.
The deal, which consists of bonds subject to the alternative minimum tax and non-AMT bonds, is rated A1 by Moody’s and A-plus by S&P and Fitch.
The New York City Municipal Water Finance Authority said Wednesday that it plans to sell $450 million of tax-exempt fixed-rate second general resolution revenue bonds on Wednesday, Jan. 16 after a one-day retail order period.
Proceeds will be used to fund capital projects.
The bonds will be sold via negotiated sale through the authority’s underwriting syndicate, led by book-running lead manager Barclays, with Raymond James and Siebert Cisneros Shank & Co. serving as co-senior managers.
The Bond Buyer’s 30-day visible supply calendar decreased $1.58 billion to $9.58 billion for Wednesday. The total is comprised of $3.03 billion of competitive sales and $6.55 billion of negotiated deals.
Municipal bonds were mostly weaker on Wednesday, according to a late read of the MBIS benchmark scale. Benchmark muni yields fell as much as three basis points in the one- to six-year maturities, rose as much as one basis point in the eight- to 30-year maturities and were unchanged in the seven-year maturity.
High-grade munis were also mostly weaker, with yields calculated on MBIS’ AAA scale falling as much as one basis point in the one- to 10-year maturities and rising as much as one basis point in the 11- to 30-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 one basis point while the yield on the 30-year muni maturity gained three basis points.
Treasury bonds were mixed amid stock market volatility. The Treasury 30-year was yielding 3.022%, the 10year yield stood at 2.728%, the fiveyear was at 2.554%, the two-year was at 2.549% while the Treasury three-month bill stood at 2.443%.
On Wednesday, the 10-year muni-to-Treasury ratio was calculated at 81.8% while the 30-year muni-to-Treasury ratio stood at 101.0%, according to MMD. The Municipal Securities Rulemaking Board reported 45,200 trades on Tuesday on volume of $10.34 billion.
California, New York and Texas were the municipalities with the most trades, with the Golden State taking 17.232% of the market, the Empire State taking 10.158% and the Lone Star State taking 9.001%. ◽