Prices of top-shelf municipal bonds finished weaker on Tuesday, traders said, with yields on some maturities strengthening by as much as two basis points.

In the primary market, New York City's general obligation bonds were priced for retail investors as several large competitive offerings were sold.

SECONDARY MARKET

The yield on the 10-year benchmark muni general obligation was up two basis points to 2.20% from 2.18% on Monday, while the yield on the 30-year GO rose two basis points to 3.14% from 3.12%, according to the final read of Municipal Market Data's triple-A scale.

Treasury prices were lower on Tuesday, with the yield on the two-year Treasury note rising to 0.67% from 0.65% on Monday, while the 10-year yield rose to 2.25% from 2.23% and the 30-year yield increased to 2.96% from 2.94%.

Market trading was cautious as the Federal Open Market Committee met to discuss monetary policy. An announcement on interest rates is set for Wednesday afternoon, although most analysts think there will be no rate increase this time, with many seeing it likely at the next meeting in six weeks.

The 10-year muni to Treasury ratio was calculated on Tuesday at 99.2% versus 95.8% on Monday, while the 30-year muni to Treasury ratio stood at 106.0% compared to 105.0%, according to MMD.

PRIMARY MARKET

Siebert Brandford Shank priced the Big Apple's $750 million of Fiscal 2016 Series A&B GOs for mom and pop investors on Tuesday. Retail orders will continue to be taken on Wednesday ahead of the institutional pricing on Thursday.

The $640.2 million of Series A bonds were priced to yield from 1% with 5% and 3% coupons in a split 2018 maturity to 2.70% with a 5% coupon in 2026; a 2017 maturity was offered as a sealed bid. No retails orders were taken in the 2027 through 2030 maturities.

The $109.8 million of Series B bonds were priced to yield from 1% with a 4% coupon in 2018 to 3.54% with a 3.5% coupon in 2035; the 2016 and 2017 maturities were offered as sealed bids.

The issue was rated Aa2 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings.

Citigroup priced as a remarketing the New York City Industrial Development Authority's $364.86 million of Series 2002B special facilities revenue bonds for the American Airlines John F. Kennedy International Airport project. The bonds, subject to the alternative minimum tax, were priced at par to yield 2% on Aug. 1, 2028 with a mandatory put date of Aug. 1, 2016. The issue is not rated.

In the competitive arena, the Virginia College Building Authority sold $290 million of Series 2015D educational facilities revenue bonds under the 21st Century College and Equipment Program.

Wells Fargo Securities won the issue with a true interest cost of 2.94%. The bonds were priced to yield from 0.17% with a 5% coupon in 2016 to 3.608% with a 3.50% coupon in 2035. The issue was rated Aa1 by Moody's and AA-plus by Fitch.

"We are very thrilled with the results, as we got a low TIC from Wells Fargo and the cover was less than a half basis point differential," said Michael Walsh, public finance manager for the CBA. "We were thinking we would come in around the 3% range or a little higher but the market was moderately softer and that was a pleasant surprise. We couldn't have timed it any better. Who knows what will happen with the Fed meeting, so it was prudent to get in ahead of that."

The last time the authority competitively sold comparable bonds was on May 1, 2014, when Bank of America Merrill Lynch won $27.99 million of Series 2014B educational facilities revenue refunding bonds with a TIC of 1.70%.

Fort Worth, Texas, sold $256 million of bonds in two separate competitive sales. Citigroup won the $127.82 million of Series 2015A general purpose refunding and improvement bonds with a TIC of 2.45%. The bonds were priced to yield from 0.20% with a 4% coupon in 2016 to 3.38% with a 3.375% coupon in 2035. Barclays Capital won the $126.64 million of Series 2015A water and sewer system revenue refunding and improvement bonds with a TIC of 2.69%. No pricing information was available. The general purpose bonds were rated Aa1 by Moody's and AA-plus by S&P and Fitch and the water bonds were rated Aa1 by Moody's and AA by S&P and Fitch.

In the negotiated sector, Citigroup priced San Antonio, Texas' $275.28 million tax-exempt offering, consisting of Series 2015 general improvement and refunding bonds, Series 2015 combination tax and revenue certificates of obligation and Series 2015 tax notes.

The $234.23 million of bonds were priced to yield from 0.17% with a 5% coupon in 2016 to 3.53% with a 4% coupon in 2035. The $36.29 million of certificates were priced to yield from 0.19% with a 1.5% coupon in 2016 to 3.368% with a 3.5% coupon in 2035. The $4.77 million of Series 2015 tax notes were priced as 5s to yield 0.23% in 2016, 0.54% in 2017 and 0.82% in 2018.

On Monday, Citi priced San Antonio's $43.82 million of taxable Series 2015 combination tax and revenue certificates of obligation. The issue was priced as 1s to yield 0.23% in 2016 and priced at par to yield from 0.88% in 2017 to 4.162% in 2035.

All the bonds were rated triple-A by Moody's, S&P and Fitch.

Since 1995, the city of San Antonio has issued roughly $18.35 billion of debt. The years of 2010 and 2012 saw the most issuance with $1.55 billion and $2.06 billion, respectively. The Alamo city issued just $125 million and $86 million in 1995 and 1999, respectively.

Chip Barnett and Aaron Weitzman are reporters with Bond Buyer.

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