International troubles are occupying the market on Thursday morning with investors watching the Scotland vote on independence from the U.K., and whether that will impact the municipal market.
The number of new issuances coming to market on Thursday is a bit less than the slew of deals priced on Tuesday and Wednesday, but Thursday still promises some action for investors. Below, your playbook to attack the day.
Primary (listed in order of largest par amount and descending)
- After three days of retail orders the Massachusetts' $350 million green GOs will be available for institutional sale. Morgan Stanley is the lead underwriter on the deal, and it earned ratings of Aa1 from Moody's Investors Service and AA-plus from Standard & Poor's and Fitch Ratings.
- The University of North Carolina is selling $265 million taxable general revenue refunding bonds, with Wells Fargo as lead underwriter. The deal earned triple-A ratings from the three major rating agencies.
- $110 million California GOs will be up for auction, coming in two-parts. The bonds are rated AA2 by Moody's, AA by S&P and AA-minus by Fitch.
The larger $61 million section is scheduled for auction at 11:30am EST. - The second $49 million portion is expected for auction at 12:30pm EST.
All information is according to The Bond Buyer, TM3, Ipreo, and data provided by Interactive Data.
Secondary
The San Francisco GO earthquake safety and emergency response 5s in 2020 are one of the most actively traded securities in the secondary now that they are free to trade following their $156.2 million pricing on Wednesday.
The bonds are mostly trading at their initial yield offering of 1.36%, but one odd-lot inter deal trade was able to get the bonds at a slightly cheaper 1.39%.
Economic News
- Housing starts for August were announced Thursday morning, and showed starts fell 14.4% for August to 956,000 units. Analysts had predicted starts would come in around 1.038 million units.
- Scotland voters are headed to the polls to decide whether they want a referendum on independence from the UK.
A trader in Chicago called the referendum Thursday's "main event."
"I think [the vote] may affect Treasuries, so if we get the yes vote there is economic concern for Scotland. The Bank of England stands behind Scottish assets, so if [Scotland votes to secede] that might be viewed somewhat negatively. If we get a yes we might see a little bit of a safe haven effect to Treasuries, that would provide indirect benefit to munis," Anthony Valeri, CFA at LPL Financial, said in an interview with The Bond Buyer.
Scales
Municipal Market Data's triple-A scale showed the market sold off in the intermediate part of the curve on Thursday morning with yields for bonds maturing in six to eight years increasing as much as one basis point, yields for nine to 10 year maturities growing by up to two basis points, and yields for 11 to 13 year maturities rising up to one basis point. The rest of the curve held steady.
Treasuries
Treasuries' yields rose with the two-year notes increasing four basis points to 0.59%, the 10-year jumping by four basis points to 2.64%, and the 30-year by one basis point to 3.37%.
