More Supply on the Way

Traders were awaiting more supply on Wednesday after a hefty bunch of new deals were priced in the primary on Tuesday.

Secondary Market

Treasury prices were higher on Wednesday. The yield on the two-year Treasury note declined to 0.54% from 0.56% on Tuesday, while the 10-year yield decreased to 1.89% from 1.94% and the 30-year yield dropped to 2.50% from 2.54%.

The yield on the 10-year benchmark muni general obligation remained at 1.96% from Monday, while the yield on 30-year GO was flat at 2.80%, according to the final read of Municipal Market Data's triple-A scale.

On Tuesday, the 10-year muni to Treasury ratio was calculated at 101.6% versus 98.5% on Monday, while the 30-year muni to Treasury ratio stood at 110.2% compared to 109.0%.

Primary Market

The California Department of Water Resources' $765 million of power supply revenue bonds are set to be priced by JPMorgan on Wednesday. The bonds are rated Aa2 by Moody's, AA by S&P and AA-plus by Fitch.

Also on Wednesday, Barclays Capital is slated to price the Regents of the University of California's $500 million of Series 2015 AQ taxable general revenue bonds. This deal is rated Aa2 by Moody's and AA by S&P and Fitch.

On Tuesday, Raymond James priced the New York City Municipal Water Finance Authority's $451.38 million of revenue bonds for institutional investors after a pricing for retail investors on Monday. The Fiscal 2015 Series GG second general resolution water and sewer system revenue bonds were priced to yield from 2.20% with a 5% coupon in 2025 to 3.23% with a 3.125% coupon and 2.96% with a 5% coupon in a 2032 split maturity; a 2037 maturity was priced as 5s to yield 3.14%; a 2038 maturity was priced as 4s to yield 3.48%; and a 2039 split maturity was priced as 5s to yield 3.17% and 3.07%. The issue is rated Aa2 by Moody's Investors Service and AA-plus by Standard & Poor's and Fitch Ratings.

The state of Utah competitively sold $223.59 million of Series 2015 unlimited tax general obligation refunding bonds. JPMorgan won the bonds with a true interest cost of 1.9479%. The bonds were priced to yield 1.09% with a 5% coupon in 2019 and from 1.62% with a 5% coupon in 2022 to 2.26% with a 3.5% coupon in 2026.

The bonds are rated triple-A by Moody's, S&P and Fitch.

Utah previously sold bonds competitively on July 11, 2013, when Morgan Stanley won $226 million of Series 2013 GOs with a true interest cost of 2.8711%.

Since 1995, Utah has sold $6.752 billion of GOs, with the largest issuance coming in in 2009 and 2001 when the state issued $1.481 billion and $1.207 billion, respectively. The years of lightest issuance were in 2000, 2005, 2006, and 2008 when no bonds were sold.

The Orlando Utilities Commission competitively sold $94.91 million of Series 2015A utility system revenue bonds. JPMorgan won the issue with a TIC of 3.5681%. The bonds were priced as 5s to yield from 2.55% in 2028 to 2.92% in 2035. The bonds are rated Aa2 by Moody's and AA by S&P and Fitch.

The OUC sold bonds in a negotiated transaction on Nov. 20, 2013, when Jeffries priced $243 million of Series 2013 utility system revenue refunding bonds. The commission has about $1.44 billion of utility system revenue and revenue refunding bonds outstanding.

Bellevue, Wash., competitively sold $96.2 million of limited tax GO and refunding bonds. Morgan Stanley won the bonds with a TIC of 2.8399%. The bonds were priced to yield from 0.50% with a 5% coupon in 2016 to 3.34% with a 4% coupon in 2034. The issue is rated Aa1 by Moody's and triple-A by S&P.

Bellevue last sold bonds competitively on April 16, 2013, when US Bancorp won $70 million of Series 2013 limited tax GOs with a TIC of 2.6843%.

Bond Buyer Visible Supply

The Bond Buyer's 30-day visible supply calendar decreased $2.354 billion to $9.249 billion on Wednesday. The total is comprised of $2.998 billion competitive sales and $6.251 billion of negotiated deals.

MSRB Previous Session's Activity

The Municipal Securities Rulemaking Board reported 39,378 trades on Tuesday on volume of $9.606 billion.

Most active, based on the number of trades, was the Kentucky Municipal Power Agency's Series 2015A Prairie State project power system revenue refunding 4s of 2039, which traded 132 times at an average price of 99.78 with an average yield of 4.002%; (initial offering price of 97.858, an initial offering yield of 4.14%).

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