The municipal bond market on Tuesday is awaiting the institutional pricing of the New York City Municipal Water Finance Authority deal along with competitive sales from issuers in Utah, Florida and Washington state.
Secondary Market
Treasury prices were mixed on Tuesday. The yield on the two-year Treasury note declined to 0.57% from 0.58% on Monday, while the 10-year yield decreased to 1.94% from 1.96% and the 30-year yield was unchanged from 2.55%.
The yield on the 10-year benchmark muni general obligation ended flat at 1.96% on Monday, while the yield on 30-year GO remained at 2.80% from Friday, according to the final read of Municipal Market Data's triple-A scale.
On Monday, the 10-year muni to Treasury ratio was calculated at 98.5% versus 100.8% on Friday, while the 30-year muni to Treasury ratio stood at 109.0% compared to 111.0%.
Primary Market
On Tuesday, Raymond James will price the New York City Municipal Water Finance Authority's $447.77 million of revenue bonds for institutional investors after the retail pricing on Monday.
The Fiscal 2015 Series GG second general resolution water and sewer system revenue bonds were priced for retail to yield from 2.20% with a 5% coupon in 2025 to 3.23% with a 3.125% coupon in 2032; a 2038 maturity was priced as 4s to yield 3.48%. No retail orders were taken in the 2037 or 2039 maturities. The deal is rated Aa2 by Moody's Investors Service and AA-plus by Standard & Poor's and Fitch Ratings.
The state of Utah will competitively sell $224 million of Series 2015 unlimited tax general obligation refunding bonds, expected to be structured with a 2019 maturity and serials ranging from 2022 to 2026. The bonds are rated triple-A by Moody's, S&P and Fitch. Utah last sold bonds competitively on July 11, 2013, when Morgan Stanley won $226 million of Series 2013 GOs with a true interest cost of 2.8711%.
Bellevue, Wash., will competitively sell $96 million of limited tax GO and refunding bonds, expected to be structured as serials ranging from 2016 to 2034. The issue is rated Aa1 by Moody's and triple-A by S&P. Bellevue last sold bonds competitively on April 16, 2013, when US Bancorp won $70 million of Series 2013 limited tax GOs with a TIC of 2.6843%.
The Orlando Utilities Commission will competitively sell $95 million of Series 2015A utility system revenue bonds, expected to be structured as serials ranging from 2028 to 2035. The bonds are rated Aa2 by Moody's and AA by S&P and Fitch. The OUC sold bonds in a negotiated transaction on Nov. 20, 2013, when Jeffries priced $243 million of Series 2013 utility system revenue refunding bonds. The commission has about $1.44 billion of utility system revenue and revenue refunding bonds outstanding.
Citi is expected to price the Illinois Municipal Electric Agency's $585 million revenue refunding bonds on Tuesday. The bonds are rated A1 by Moody's, A by S&P, and A-plus by Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $309.9 million to $11.603 billion on Tuesday. The total is comprised of $3.221 billion competitive sales and $8.382 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 34,162 trades on Monday on volume of $6.530 billion. Most active, based on the number of trades, was the Kentucky Municipal Power Agency's Series 2015A Prairie State project power system revenue refunding 4s of 2039, which traded 148 times at an average price of 99.951 with an average yield of 3.982%; (initial offering price of 97.858, an initial offering yield of 4.14%).
