Municipal bond market traders on Monday are turning their attention toward this week’s $6.24 billion new issue slate, with the states of Connecticut and Washington leading the way.
Secondary Trading
Treasury prices were mixed on Monday, with the yield on the two-year Treasury note rising to 0.70% from 0.69% on Friday, while the 10-year yield fell to 2.15% from 2.16% and the 30-year yield decreased to 2.93% from 2.95%.
Prices of top-shelf municipal bonds finished weaker on Friday.
The yield on the 10-year benchmark muni general obligation was one basis point stronger at 2.09% from 2.08% on Thursday, while the yield on the 30-year GO was two basis points stronger at 3.10% from 3.08%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Friday at 96.5% versus 98.4% on Thursday, while the 30-year muni to Treasury ratio stood at 104.8% compared to 106.2%, according to MMD.
Primary Market
This week’s calendar is composed of $4.85 billion of negotiated deals and $1.39 billion of competitive sales.
Washington state will be selling about $983.28 million which will be comprised of one negotiated offering and four competitive sales. On Monday, the state will sell its first ever green bond, as Bank of America Merrill Lynch will be pricing the $39 million of Series 2016A-2 various purpose general obligation green bonds.
On Wednesday, the Evergreen State will be selling four competitive issues. There will be $60.71 million of Series 2016T GO taxable bonds; $191.99 million of Series 2016B motor fuel tax GOs; $193.77 million of Series R-2016A various purpose GO refunding bonds; and $497.80 million of Series 2015A-1 various purpose GOs.
All of the deals are rated Aa1 by Moody's Investors Service and AA-plus by Standard & Poor's and Fitch Ratings.
RBC Capital Markets will be pricing the state of Connecticut's $840 million of Series 2015A and Series 2015B special tax obligation bonds for transportation infrastructure. The Series 2015B will be refunding bonds. This deal has a scheduled retail order period on Wednesday followed by the institutional pricing on Thursday.
Barclays Capital is expected to price Miami-Dade County Educational Facilities Authority, Fla.'s $650 million of revenue and revenue refunding bonds for the University of Miami on Wednesday. Tentatively, the deal is split up for $400 million of tax-exempt and $250 million of taxable, Series 2015A and B.
RBC is also scheduled to price the California State of Public Works Board’s $551.6 million of Series 2015 F and G lease revenue refunding bonds. The retail order period is scheduled to take place on Monday, followed by the institutional pricing on Tuesday.
Ramirez is slated to price the Massachusetts Bay Transit Authority's $279.77 million of Series 2015 A and B senior sales tax bonds on Wednesday.
Previous Week's Most Actively Traded Issues
Revenue bonds comprised 56.88% of new issuance in the week ended Sept. 25, up from 54.12% in the previous week, according to Markit. General obligation bonds comprised 33.98% of total issuance, down from 36.88%, while taxable bonds made up 9.14%, up from 9.00%
Some of the most actively traded issues in the week were in New York and California.
In the revenue bond sector, the New York City Transitional Finance Authority 5s of 2035 were traded 86 times. In the GO bond sector, the California 5s of 2045 were traded 66 times. And in the taxable bond sector, the Sacramento Public Financing Authority lease revenue 5.637s of 2050 were traded 22 times, Markit said.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 30,079 trades on Friday on volume of $6.092 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $1.20 billion to $7.96 billion on Monday. The total is comprised of $3.07 billion competitive sales and $4.89 billion of negotiated deals.
