Municipal bond yields were little changed on Monday at mid-session as the holiday-shortened week opened on a very quiet note as traders looked to at a light primary market calendar of under $1 billion.
"It's really quiet," said a trader in Texas. "We're just cleaning up some stuff in the secondary and doing a few retail trades."
New issue volume is expected to fall to around $911 million this week, according to Ipreo LLC and The Bond Buyer. This is down from a revised $6.97 billion in new issues last week, as reported by Thomson Reuters. An estimated $7.9 billion of supply was originally expected for last week.
The bond markets are closed on Thursday for Thanksgiving and have a 2 p.m., EST, recommended close on Friday.
All of the muni deals will come to market in the two-day window of Monday and Tuesday. No deals are scheduled for Wednesday or during the abbreviated trading session on Friday.
"Most of the staff is off on Wednesday and Friday," the Texas trader said.
Primary Market
Leading off the primary market on Monday is an offering of $70 million pollution control revenue bonds from two Kentucky issuers.
The deal is being priced by Morgan Stanley & Co. on behalf of the Louisville Gas & Electric Co. project. It is comprised of $35 million of Louisville/Jefferson County, Ky., Metropolitan Government PCRs, and $35 million of Trimble County, Ky., PCRs.
Both series are structured to mature in 2027 and will be priced at par and subject to a mandatory put in 2018. The bonds are rated A1 by Moody's Investors Service and A-minus by Standard & Poor's.
Meanwhile, the biggest deal of this week is the $270 million Illinois State Toll Highway Authority toll highway senior revenue refunding bonds.
The bonds are scheduled to be priced as serials from 2018 to 2025 by Siebert Brandford Shank & Co. on Tuesday. The issue is rated Aa3 by Moody's and AA-minus by both S&P and Fitch Ratings.
Also on Tuesday, BMO Capital Markets Inc. is scheduled to price $110.97 million McHenry County, Ill., Conservation District general obligation refunding bonds as serials maturing from 2015 to 2027.
The issue is rated A1 by Moody's and AA-plus by S&P.
The only competitive sale above $50 million this week is Hudson County, N.J.'s $74 million general obligation bond offering, due 2015-2031. The bonds, rated AA by S&P, are up for bid on Tuesday.
Secondary Market
Municipal bond yields were unchanged to stronger at midday, with the benchmark 10-year GO steady at 2.15% and 30-year GO unchanged to up as much as one basis point, according to the recent read of Municipal Market Data's triple-A scale.
Treasury prices are little changed with the two-year note yield flat at 0.51% from Friday's market close. The 10-year yield is also unchanged, at 2.32% and the 30-year is off one basis point to 3.02%.
On Friday, the muni to Treasury ratio declined. The 10-year muni to Treasury ratio closed higher at 92.9% from 92.1% on Thursday. The 30-year muni to Treasury ratio closed higher at 101.9% from 100.9% on Thursday.
Equities are slightly higher with the Dow Jones Industrial Average, S&P 500 and NASDAQ all trading up.
