The municipal bond market was set today for three big competitive sales, totaling more than $1.7 billion.
On Monday, prices of top-rated municipal bonds ended mixed as a big winter storm limited trading activity.
Primary Market
Pennsylvania's $1 billion of unlimited tax general obligation bonds headline the new issue slate with bidding ending at 11 a.m., EST. The bonds are rated Aa3 by Moody's Investors Service and AA-minus by both Standard & Poor's and Fitch Ratings.
Also on today's slate is the Virginia Public School Authority's $458.675 million of school financing refunding bonds. The issue, selling at 11:30 a.m., EST, is rated Aa1 by Moody's and AA-plus by S&P and Fitch.
And the state of Wisconsin will be selling $279.375 million of unlimited tax general obligation bonds. The issue, selling at 10:30 a.m., EST, is rated Aa2 by Moody's and AA by S&P and Fitch.
A $955 million composite deal from the Trinity Health Credit Group leads the negotiated calendar. The bonds are scheduled to be priced today by Bank of America Merrill Lynch in three series -- one each from Michigan, Idaho and Maryland. The issue is rated Aa3 by Moody's, AA-minus by S&P and AA by Fitch.
Mississippi will bring a four-part sale of GOs totaling $702 million. The $157 million Series A GOs is set to be priced by Raymond James on Tuesday; the $129 million Series B taxable GOs is expected to be priced by Bank of America Merrill on Tuesday; the $247 million Series C GO refunding bonds totaling is slated to be priced by JPMorgan Securities on Thursday; and the $169 million Series D taxable GO refunding bonds will be priced by RBC Capital Markets on Tuesday. All series are rated Aa2 by Moody's, AA by Standard & Poor's, and AA-plus by Fitch.
Also on tap is the $499 million Los Angeles Department of the Airports, Calif., offering. Morgan Stanley is expected to price the issue in three series: senior revenue bonds, Series A (AMT); senior revenue bonds Series B (non-AMT); and subordinate refunding revenue bonds, Series C. The senior bonds are rated Aa3 by Moody's and AA by S&P and Fitch, while the subordinate bonds are rated A1 by Moody's and AA-minus by Standard & Poor's and Fitch.
On Monday, J.P. Morgan Securities priced the Katy Independent School District, Texas' $201.625 million of school building and refunding bonds. The $152.535 million Series 2015A unlimited tax school building bonds were priced to yield from 0.155% with a 2% coupon in 2016 to 3.02% with a 4% coupon in 2035; a 2040 term bond was priced as 5s to yield 2.70% and a 2045 term was priced as 5s to yield 2.75%. The $49.09 million unlimited tax refunding bonds, Series 2015B, were priced to yield from 1.31% with a 4% coupon in 2021 to 3.07% with a 4% coupon in 2037.
Both series are backed by the Texas Permanent School Funding Guarantee Program and are rated triple-A by Moody's Investors Service and Standard & Poor's; the bonds carry underlying ratings of Aa1 from Moody's and AA from S&P.
Secondary Market
On Tuesday, Treasury prices were mostly lower. The two-year note yield was unchanged at 0.48% from Monday; the 10-year yield rose to 1.73% from 1.67%, while the 30-year yield increased to 2.31% from 2.24%.
On Monday, the yield on the muni 10-year benchmark general obligation ended two basis points higher at 1.74% from 1.72% on Friday, while the yield on 30-year GOs was unchanged at 2.50%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio increased to 104.2% on Monday from 103.0% on Friday, while the 30-year muni to Treasury ratio slipped to 111.1% from 111.6% on Friday.
MSRB Reports Previous Session's Activity
The Municipal Securities Rulemaking Board reported 28,587 trades on Monday on volume of $6.352 billion.
Most active on Monday, based on the number of trades, was the Pennsylvania 2013 state first service bond 5s of 2025, which traded 133 times with an average price of 122.214 and an average yield of 2.03%.
