The municipal bond market calendar seems to be weathering the storm today. While some issuers have postponed their deals, the Pennsylvania bond sale and the Utah Transit Authority sales currently remains on track. Meanwhile, prices of high-quality municipal bond were unchanged at mid-session.
Topping the competitive slate is the $1 billion general obligation sale from Pennsylvania, scheduled to go up for bidding at 11 a.m., EST, tomorrow.
"We have no plans as of now to pull it," a spokesman for the state Office of the Budget said. "But if we do, we would put out a statement today."
Pennsylvania's unlimited tax GOs will be structured as serials ranging from 2016 to 2035. The issue is rated Aa3 by Moody's Investors Service and AA-minus by both Standard & Poor's and Fitch Ratings. The Keystone state last came to market on April 29, 2014 when it sold $834.945 million of GOs to Bank of America Merrill Lynch who won competitively them with a true interest cost of 3.2542%.
Meanwhile, the Katy Independent School District, Texas' $210 million bond sale expected to be priced on Tuesday by J.P. Morgan has been placed on a day-to-day schedule, according to traders. Several other smaller issuers in Pennsylvania, New York, New Jersey, Connecticut, Massachusetts and Maine have postponed their sales, according to Ipreo.
Primary Market
This week's total new issue volume was estimated at $6.138 billion, according to Ipreo and The Bond Buyer. The calendar is comprised of $3.884 billion negotiated deals and $2.254 billion of competitive sales.
Morgan Stanley is expected to price the biggest negotiated deal of the week -- the Utah Transit Authority's $831.6 million offering.
UTA is going forward with the retail order period today and may do the institutional pricing as well.
"There seems to be good investor focus this morning, and so the window may be open to get it all done today," said financial advisor Brian Baker, vice president of Zions Bank Public Finance.
The deal will be structured as $639.43 million sales tax revenue refunding bonds, Series 2015A, and $192.21 million subordinated sales tax revenue refunding bonds, Series 2015A.
The issue is rated Aa2 by Moody's, AAA by S&P and AA by Fitch.
Also this week, Citigroup Global Markets is slated to price the $385.155 million Kentucky State Property and Building Commission bonds. Glendale, Ariz., will be coming to market with four separate negotiated deals totaling $277.28 million. Also on tap is a $289.21 million competitive sale of GO refunding bonds from San Francisco, Calif. And JP Morgan is scheduled to price the Maryland Health and Higher Educational Facilities Authority's $333.35 million offering for Medstar Health Inc.
Secondary Market
Prices of top-rated munis were unchanged at midday.
The yield on the 10-year benchmark general obligation was unchanged from 1.81% on Friday, while the yield on 30-year GOs was flat at 2.59%, according to a read of MMD's triple-A benchmark scale.
Treasury prices were mixed on Monday, with the two-year note yield up to 0.51% from 0.50% on Friday. The 10-year yield was unchanged at 1.83%, while the 30-year yield rose to 2.41% from 2.40%.
On Friday, the 10-year muni to Treasury ratio increased to 98.0% from 96.9% on Thursday, while the 30-year muni to Treasury ratio rose to 107.6% from 106.5%.
MSRB Reports Previous Session's Activity
The Municipal Securities Rulemaking Board reported 33,744 trades on Friday on volume of $9.379 billion.
Most active on Friday, based on the number of trades, was the New Ulm Independent School District, Minn., school building 2015 Series A 3.3% bonds of 2040, which traded 142 times with an average price of 98.305 and an average yield of 3.401%.
