Municipal bond traders are awaiting Tuesday's competitive sale of $500 million of general obligation bonds by the state of Connecticut and a $924 million green bond deal from Puget Sound Transit.
Secondary Market
Treasury prices were lower on Tuesday, with the yield on the two-year Treasury note rising to 0.68% from 0.66% on Monday, while the 10-year yield rose to 2.18% from 2.15% and the 30-year yield increased to 2.88% from 2.85%.
The yield on the 10-year benchmark muni general obligation on Monday was steady from 2.19% on Friday, while the yield on the 30-year GO fell two basis points to 3.10% from 3.12%, according to the final read of Municipal Market Data's triple-A scale. Some shorter-dated maturities were up by as much as two basis points.
The 10-year muni to Treasury ratio was calculated on Monday at 102.0% versus 99.5% on Friday, while the 30-year muni to Treasury ratio stood at 108.5% compared to 106.8%, according to MMD.
Primary Market
On Tuesday's competitive calendar are two separate sales from the state of Connecticut, totaling $500 million.
The Nutmeg State's offerings consist of $250 million of Series 2015E GOs and $250 million of Series 2015B taxable GOs.
Both sales are rated Aa3 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings.
The last time the state competitively sold comparable bonds was on Aug. 6, 2014, when JPMorgan won $300 million of Series 2014E GOs with a TIC of 3.03%.
Leading off the negotiated slate, is Tuesday's $923.84 million green bond sale from Sound Transit, the Central Puget Sound Regional Transit Authority, Wash.
The sales tax improvement bonds are slated to be priced by JPMorgan on Tuesday, and are initially structured as Series 2015S-1 green bonds and Series 2015S-2 green bonds. The issue is initially structured as serials running from 2018 through 2050. The issue is rated Aa2 by Moody's and triple-A by S&P.
Wells Fargo Securities is expected to price the Philadelphia Gas Works' revenue refunding bonds on Tuesday. The issue is rated Baa1 by Moody's, A-minus by S&P and BBB-plus by Fitch.
On Wednesday, Minnesota will competitively sell five separate sales totaling over $1 billion.
The offerings consist of $386.50 million of Series 2015D general obligation state various purpose refunding bonds; $376.11 million of Series 2015A GO state various purpose refunding bonds; $310 million of Series 2015B GO state trunk highway bonds; $14.89 million of Series 2015E GO state trunk highway refunding bonds; and $7.2 million of Series 2015C taxable GO state various purpose bonds.
The state last competitively sold comparable bonds on Aug. 12, 2014, when Bank of America Merrill Lynch won $429.67 million of Series 2014A GO state various purpose bonds with a true interest cost of 2.83%.
Since 1995, the state of Minnesota has issued roughly $17.14 billion of debt. The years of 2009 and 2010 saw the most issuance with $1.71 billion and $1.77 billion, respectively. The North Star State had low issuance years of 1997 and 1999, when they came to market with $226 million and $185 million, respectively.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 35,714 trades on Monday on volume of $5.810 billion.
The most active bond, based on the number of trades, was the New York City Fiscal 2016 Series A GO 5s of 20265, which traded 176 times at an average price of 108.582, an average yield of 2.845%. The bonds were initially priced at 97.352 to yield 4.41%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar was up $1.20 billion to $10.86 billion on Tuesday. The total is comprised of $3.58 billion competitive sales and $7.29 billion of negotiated deals.
