The municipal bond market saw over $1.7 billion of new supply hit the screens in less than an hour as Pennsylvania, Wisconsin and a Virginia issuer all sold bonds in the competitive arena.
Meanwhile, prices of top-rated municipal bonds were weaker at mid-session, with some yields up by as much as four basis points.
Primary Market
Pennsylvania sold $1 billion of unlimited tax general obligation bonds. Bank of America Merrill Lynch won the issue with a true interest cost of 2.9915%. The bonds are rated Aa3 by Moody's Investors Service and AA-minus by both Standard & Poor's and Fitch Ratings. No other information was immediately available.
The Virginia Public School Authority sold $458.675 million of school financing refunding bonds. Citigroup won the issue with a TIC of 2.1858%. The bonds are rated Aa1 by Moody's and AA-plus by S&P and Fitch. No other information was immediately available.
Wisconsin sold $279.375 million of unlimited tax general obligation bonds. Jefferies won the issue with a TIC of 3.1278%. The bonds are rated Aa2 by Moody's and AA by S&P and Fitch. No other information was immediately available.
An approximately $1 billion composite deal from the Trinity Health Credit Group leads the negotiated calendar and consists of new money and refunding. The bonds are scheduled to be priced by Bank of America Merrill Lynch in three series -- from Michigan, Idaho and Maryland. About $75 million in interest-rate savings is expected from the refunding section. 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.
Secondary Market
Prices of top-quality municipal bonds were weaker at midday.
The yield on the muni 10-year benchmark general obligation was up from two to four basis points from 1.74% on Monday, while the yield on 30-year GOs was up from two to four basis points from 2.50%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were lower today. The two-year note yield rose to 0.49% from 0.48% on Monday; the 10-year yield rose to 1.75% from 1.67%, while the 30-year yield increased to 2.34% from 2.24%.
On Monday, the 10-year muni to Treasury ratio increased to 104.2% 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%.
