A day after municipal yields dropped, market participants are waiting for more new issuance to hit screens on Wednesday, which may or may not include the biggest deal of the week.
Secondary Market
U.S. Treasuries were weaker on Wednesday morning. The yield on the two-year Treasury gained to 1.18% from 1.15% on Tuesday, while the 10-year Treasury yield increased to 2.37% from 2.32%, and the yield on the 30-year Treasury bond rose to 2.97% from 2.93%.
The 10-year benchmark muni general obligation yield was two basis points lower to 2.14% on Tuesday from 2.16% on Friday, while the yield on the 30-year GO was down three basis points to 2.88% from 2.91%, according to a final read of Municipal Market Data's triple-A scale.
On Tuesday, the 10-year muni to Treasury ratio was calculated at 92.0% compared to 90.4% on Friday, while the 30-year muni to Treasury ratio stood at 98.3%, versus 97.4%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 40,856 trades on Tuesday on volume of $9.47 billion.
Primary Market
The action officially got started on Tuesday but should pick up a bit Wednesday and even more so on Thursday.
Goldman Sachs is expected to price the city of Chicago's $1.16 billion of taxable and tax-exempt general obligation bonds. This is the deal of the week and one that everyone will be keeping their eyes on.
The underwriter said the sale will be on Wednesday or Thursday, noting that the taxable part and tax-exempts will come on separate days.
The deal is rated BBB-plus by S&P Global Ratings and Kroll Bond Rating Agency and BBB-minus by Fitch Ratings.
Since 2007, Chicago has issued about $26.68 billion of debt, with the largest issuance occurring in 2015 when it sold roughly $4.24 billion of debt. The windy city saw its lowest issuance total in the past 10 years back in 2009 when it issued roughly $778 million. The city has issued more than $2 billion every year since 2013 and a total of eight times since 2007.
RBC Capital Markets is expected to price the city and county of Denver, Colo., School District No. 1's $476.645 million of GO bonds on Wednesday. The deal is insured by the Colorado State Intercept Program and rated Aa2 by Moody's Investors Service, AA by S&P and AA-plus by Fitch.
In the competitive arena on Wednesday, the city and county of San Francisco will be selling $174.11 million of GO public health and safety bonds. The deal is rated Aa1 by Moody's and AA-plus by S&P and Fitch.
Also, Fulton County, Ga.is expected to sell $104.785 million of GO library bonds. The deal is rated Aa1 by Moody's, AA-plus by S&P and AA by Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $466.5 million to $13.81 billion on Wednesday. The total is comprised of $3.33 billion of competitive sales and $10.48 billion of negotiated deals.
