The municipal bond market is preparing Wednesday to take on the deals that are still left on the calendar after a snowstorm knocked about $1.7 billion of bonds off this week's new issue slate.
Still scheduled for sale on Wednesday is the $385 million Kentucky bond issue.
Primary Market
Citigroup Global Markets is slated to price the $385.155 million Kentucky State Property and Building Commission bonds.
"The transactions continue to be scheduled to price Wednesday, which is supposed to be after the brunt of the storm," Ryan Barrow, executive director of Kentucky's Office of Financial Management, said on Monday.
The offering will be structured as $128.5 million of 20-year new money revenue bonds and $257 million of refunding bonds for debt-service savings. In the current interest rate environment, the commission estimates the refunding's present value savings at about $30.6 million, or 11% of refunded par, according to Barrow.
The bonds are rated Aa3 by Moody's Investors Service and A-plus by Standard & Poor's and Fitch Ratings.
Morgan Stanley on Monday priced the Utah Transit Authority's $854.19 million sales tax revenue refunding bonds and subordinated sales tax revenue refunding bonds. The UTA saw net present value savings of $77.7 million or 8.8% on the deal, according to Robert Biles, UTA chief financial officer.
Meanwhile, the $1 billion general obligation bond sale by Pennsylvania, originally scheduled to go up for bidding on Tuesday, was pushed back to Feb. 3.
The big snowstorm also affected the some of the week's other new issues.
Atlantic City, N.J., postponed its $12 million bond anticipation note sale, originally scheduled for Tuesday. And several other smaller issuers in Pennsylvania, New York, New Jersey, Connecticut, Massachusetts and Maine also put off their sales, according to Ipreo. All together, the storm caused issuers to postpone about $1.7 billion of bond sales.
Secondary Market
On Wednesday, Treasury prices were mostly flat, with the two-year note yield rising to 0.52% from 0.50% on Tuesday. The 10-year yield was unchanged at 1.82%, while the 30-year yield was unchanged at 2.39%.
On Tuesday, prices of top-rated munis were stronger, traders said. The yield on the 10-year benchmark general obligation was down three basis points to 1.78% from 1.81% on Monday, while the yield on 30-year GOs was off two basis points to 2.57% from 2.59%, according to the final read of MMD's triple-A benchmark scale.
The 10-year muni to Treasury ratio decreased to 97.8% on Tuesday from 99.30% on Monday, while the 30-year muni to Treasury ratio fell to 107.1% from 108.1%.
MSRB Reports Previous Session's Activity
The Municipal Securities Rulemaking Board reported 29,414 trades on Tuesday on volume of $6.134 billion.
Most active on Tuesday, based on the number of trades, was the Hawaii State Department of Budget and Finance's 2015 Series A special purpose revenue bonds for the Queens Health System 4s of 2040, which traded 58 times with an average price of 104.211 and an average yield of 3.514%.
Richard Williamson and Shelly Sigo contributed to this report.
