Municipal bond traders will be watching for more supply today as two big deals, one each in the negotiated and competitive sector, are set for sale.
Secondary Market
Treasury prices were higher on Wednesday as the yield on the two-year Treasury note declined to 0.59% from 0.60% on Tuesday, while the 10-year yield decreased to 2.24% from 2.27% and the 30-year yield dropped to 3.03% from 3.04%.
The yield on the 10-year benchmark muni general obligation on Tuesday finished up two basis points to 2.30% from 2.28% on Monday, while the yield on the 30-year GO rose three basis points to 3.28% 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 101.8% versus 102.5% on Monday, while the 30-year muni to Treasury ratio stood at 108.0% compared to 109.5%, according to MMD.
Primary Market
Topping the calendar this week is a $1 billion revenue bond issue from Florida's Citizens Property Insurance Corp. The deal is preliminarily structured as $750 million of fixed-rate bonds with five, seven, and 10-year maturities, and $250-million in three-year floating rate notes. A retail order period was scheduled for Tuesday. The institutional pricing is slated for Wednesday. The issue is rated A1 by Moody's, A-plus by S&P and AA-minus by Fitch.
In the competitive sector, Springfield, Mo., is selling $523.77 million of Series 2015 public utility refunding revenue bonds on Wednesday. The bonds are rated AA-plus by S&P and AA by Moody's. The last time Springfield was in the competitive market was on Sept. 14, 2006, when it sold $615 million of Series 2006 public utility revenue bonds to UBS Securities with a true interest cost of 4.54%.
Seattle, Wash., will offer $229.15 million of Series 2015 water system improvement and refunding revenue bonds on Wednesday. The issue is rated Aa1 by Moody's and AA-plus by S&P.
The last time the city sold bonds competitively was on May 15, 2012, when Citi won $238.77 million of Series 2012 water system refunding revenue bonds with a TIC of 2.62%.
Nassau County, N.Y., is selling $168.90 million of Series 2015 B general improvement bonds on Wednesday. The issue is rated A1 by Moody's, A-plus by S&P and A by Fitch.
The last time the county sold bonds competitively was on Jan. 21 when FTN Financial Capital Markets won $29.64 million of Series 2015A general improvement bonds with a TIC of 2.99%.
The Santa Clara Finance Authority, Calif., is selling $103.37 million of Series 2015P refunding lease revenue bonds for multiple facilities projects on Wednesday. The issue is rated AA-plus by S&P and AA by Fitch.
The last time the authority competitively sold bonds was on April 8, 2014, when Morgan Stanley won $11.72 million of Series 2014 O refunding lease revenue bonds for multiples facilities projects with a TIC of 1.92%.
The state of Connecticut is in the market again, this time with $481.62 million of Series 2015C and Series 2015D bonds. Loop Capital Markets is slated to price the issue on Wednesday, which will consist of $200 million SIFMA-indexed bonds and $281.62 million of general obligation bonds. The issue is rated Aa3 by Moody's and AA by S&P, Fitch and Kroll Bond Rating Agency.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $2.11 billion to $13.83 billion on Wednesday. The total is comprised of $6.05 billion competitive sales and $7.78 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 44,874 trades on Tuesday on volume of $8.644 billion.
The most active bond, based on the number of trades, was the Pennsylvania Turnpike Commission's Series A of 2015 Series A-1 fixed-rate turnpike revenue bonds 4s of 2035, which traded 236 times at an average price of 99.982 with an average yield of 3.982%. The bonds were initially priced at 98.622% to yield 4.10%.
