More municipal bond volume was headed to market on Wednesday, led by big competitive sales from the states of Pennsylvania and New Jersey. Traders are keeping a close eye on yields, which have been trending downward this week.
Secondary Market
U.S. Treasuries were stronger on Wednesday. The yield on the two-year Treasury declined to 1.11% from 1.12% on Tuesday, the 10-year Treasury dropped to 2.37% from 2.39%, while the yield on the 30-year Treasury bond decreased to 3.06% from 3.08%.
Top-rated municipal bonds finished substantially stronger on Tuesday. The yield on the 10-year benchmark muni general obligation declined eight basis points to 2.43% from 2.51% on Monday, while the yield on the 30-year decreased nine basis points to 3.23% from 3.32%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 101.6% on Tuesday compared to 105.2% on Monday while the 30-year muni to Treasury ratio stood at 104.9% versus 108.8%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 59,129 trades on Tuesday on volume of $15.87 billion.
Primary Market
Pennsylvania will competitively sell $613.15 million of general obligation refunding bonds, second refunding series of 2016, on Wednesday.
The deal is rated Aa3 by Moody's Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings.
New Jersey will competitively sell $300 million of various purpose GO on Wednesday. The bonds are rated A2 by Moody's, A-minus by S&P and A by Fitch.
In the negotiated sector, Citigroup is expected to price the Central Puget Sound Regional Transit Authority, Wash.'s Series 2016 S-1 sales tax and motor vehicle excise tax green bonds on Wednesday. The deal is rated Aa2 by Moody's and triple-A by S&P.
Since 2007, the Puget Sound RTA has sold roughly $2.5 billion of securities, with the highest issuance occurring in 2015 when it sold $943 million. The authority did not issue any bonds in 2008, 2010, 2011, 2013 or 2014.
Stifel is set to price the California Pollution Control Financing Authority's $215 million of Series 2016A solid waste disposal revenue bonds for the CalPlant 1 Project on Wednesday.
Bank of America Merrill Lynch is expected to price the California Municipal Finance Authority's $201 million of Series 2017A revenue bonds for the NorthBay Healthcare group on Wednesday. The deal is rated BBB-minus by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $2.22 billion to $12.84 billion on Wednesday. The total is comprised of $2.84 billion of competitive sales and $9.99 billion of negotiated deals.