The municipal bond market was waiting the bulk of the week's paltry supply to price on Tuesday as traders kept watch on muni yields, which fell sharply on Monday in the wake of Puerto Rico and Greece financial turmoil.
Secondary Trading
Treasury prices were mostly lower on Tuesday with the yield on the two-year Treasury note unchanged from 0.64% on Monday, while the 10-year yield rose to 2.35% from 2.34% and the 30-year yield increased to 3.12% from 3.10%.
The yield on the 10-year benchmark muni general obligation closed down six basis points to 2.28% from 2.34% on Friday, while the yield on the 30-year GO was off six basis points to 3.28% from 3.34%, according to the final read of Municipal Market Data's triple-A scale. Some shorter-term maturities were unchanged to down as much as five basis points.
The 10-year muni to Treasury ratio was calculated on Monday at 98.3% versus 93.4% on Friday, while the 30-year muni to Treasury ratio stood at 106.1% compared to 102.3%, according to MMD.
Primary Market
Morgan Stanley is set to price the Metropolitan Washington Airports Authority's $350 million of Series 2015 B, C and D airport system revenue and refunding bonds on Tuesday. The issue is rated A1 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings.
Morgan Stanley is also expected to price the state of Arizona's $168 million of Series 2015 refunding certificates of participation on Tuesday. The COPs are rated Aa3 by Moody's and AA-minus by S&P.
Jefferies is slated to price the Jets Stadium Finance Issuer 2015, LLC's $147 million of Series 2015 taxable weekly mode variable-rate demand notes on Tuesday. The notes are rated VMIG1 by Moody's and A1 by S&P.
Wells Fargo Securities is set to price Clark County, Nev.'s $102 million of revenue refunding bonds for the Las Vegas-McCarran International Airport on Tuesday. The bonds, initially structured as serials running from 2019 through 2027, are rated A1 by Moody's and A-plus by S&P.
The only competitive bond sale over $100 million will take place on Tuesday, when the North Dakota Public Finance Authority offers $125 million of Series 2015A revolving fund program bonds. The last time the PFA competitively sold comparable bonds was on April 23, when Citi won $25.62 million of Series 2015B capital financing program bonds with a true interest cost of 3.33%.
Late Monday, Citi repriced the Texas Transportation Commission's $786.93 million of state highway fund first tier revenue refunding bonds. The issue was repriced to yield from 0.86% with a 3% coupon in 2017 to 2.71% with a 5% coupon in 2026. The bonds were rated triple-A by Moody's and S&P. The deal came to market a day earlier than expected.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 34,124 trades on Monday on volume of $5.543 billion.
The most active bond, based on the number of trades, was the New York City Transitional Finance Authority's Series 2015 S-2 building and revenue bond 4s of 2044, which traded 97 times at an average price of 100.083 with an average yield of 3.967%. The bonds were initially priced at 99.625 to yield 4.022%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $706.6 million to $7.82 billion on Tuesday. The total is comprised of $3.10 billion competitive sales and $4.72 billion of negotiated deals.
