Municipal bond market traders will be awaiting the second wave of new supply on Wednesday, as large deals from New York, Florida and Hawaii and are slated to come to market.
Secondary Market
Treasury prices were mixed on Wednesday, with the yield on the two-year Treasury note unchanged from 0.68% on Tuesday, while the 10-year yield fell to 2.31% from 2.34% and the 30-year yield decreased to 3.04% from 3.08%.
The yield on the 10-year benchmark muni general obligation on Tuesday finished down two basis points to 2.27% from 2.29% on Monday, while the yield on the 30-year GO was off one basis point to 3.24% from 3.25%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Tuesday at 96.9% versus 96.6% on Monday, while the 30-year muni to Treasury ratio stood at 105.2% compared to 104.7%, according to MMD.
Primary Market
Morgan Stanley is set to price DASNY's $1.33 billion of Series 2015A New York State sales tax revenue bonds for institutions after it held a one-day retail order period on Tuesday.
The bonds were priced for retail to yield from 0.59% with 2%, 3% and 5% coupons in a triple-split 2017 maturity to 2.55% with a 5% coupon in 2026. The 2016 maturity was offered as a sealed bid.
The issue was rated triple-A by Standard & Poor's and AA-plus by Fitch Ratings.
Bank of America Merrill Lynch is expected to price the city and county of Honolulu, Hawaii's $593 million of wastewater system revenue bonds, which consist of Series 2015A junior refunding bonds and Series A and B senior refunding bonds.
The senior bonds are rated Aa2 by Moody's and AA-minus by S&P while the junior bonds are rated Aa3 by Moody's and AA-minus by S&P.
Since 1995, the city and county of Honolulu has issued roughly $9.26 billion of debt. The years of 2005 and 2012 saw the most issuance with $921 million and $1.18 billion, respectively. Honolulu did not come to market at all in 1996, 2013 or 2014.
BAML is also slated to price the Hillsborough County Aviation Authority, Fla.'s $334 million of revenue bonds for the Tampa International Airport, consisting of Series A AMT subordinated revenue bonds and Series B non-AMT bonds. The deal is rated A1 by Moody's, A-plus by S&P and A by Fitch.
And BAML is expected to price the Harris County Cultural Education Facilities Finance Corp., Texas' $300 million of Series 2015 revenue bonds for the Houston Methodist Hospital. The bonds are rated AA by S&P.
Siebert Brandford Shank is set to price for retail investors the New York Metropolitan Transportation Authority's $500 million of Series 2015C transportation revenue refunding bonds, consisting of $400 million Subseries 2015C-1 fixed-rates, $50 million of Subseries 2015C-2 mandatory tender bonds and $50 million of Subseries 2015C-3 Libor floating-rate tender notes. The one-day retail order period is being held ahead of the institutional pricing on Thursday.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 36,717 trades on Tuesday on volume of $6.808 billion.
The most active bond, based on the number of trades, was the Lehigh County General Purpose Authority, Pa., Series 2015A hospital revenue 4 1/4s of 2045, which traded 130 times at an average price of 99.893, an average yield of 4.243%. 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 decreased $1.93 billion to $10.87 billion on Wednesday. The total is comprised of $1.86 billion competitive sales and $9.01 billion of negotiated deals.
