Muni Market Gears Up for First of Week's Big Deals

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Municipal bond market participants are set to see the first part of the week's $16.5 billion calendar hit the screens on Tuesday, led by negotiated deals in Georgia and Virginia and a competitive sale in Colorado.

Secondary Market

U.S. Treasuries were little changed on Tuesday. The yield on the two-year rose to 0.85% from 0.84% on Monday, the 10-year Treasury yield gained to 1.77% from 1.76% and the yield on the 30-year Treasury bond decreased to 2.51% from 2.52%.

Top-rated municipal bonds finished unchanged on Monday. The yield on the 10-year benchmark muni general obligation was flat from 1.72% on Friday, while the yield on the 30-year was unchanged at 2.54%, according to a read of Municipal Market Data's triple-A scale.

On Monday, the 10-year muni to Treasury ratio was calculated at 97.7% compared to 99.1% on Friday, while the 30-year muni to Treasury ratio stood at 101.0% versus 102.0%, according to MMD.

MSRB: Previous Session's Activity

The Municipal Securities Rulemaking Board reported 34,649 trades on Monday on volume of $6.27 billion.

Primary Market

Action gets underway on Tuesday as Bank of America Merrill Lynch is expected to price a $429 million deal for the Piedmont Healthcare Inc. project in Georgia.

The sale consists of the Fulton County Development Authority's $195.54 million of Series 2016A revenue bonds, the Hospital Authority of Clarke County's $185.15 million of Series 2016A revenue anticipation certificates and the Hospital Authority of Fayette County's $48.74 million of Series 2016A revenue anticipation certificates.

The deal is rated Aa3 by Moody's Investors Service and AA-minus by S&P Global Ratings.
Wells Fargo Securities is expected to price the Virginia Transportation Board's $317.13 million of Series 2016 federal transportation grant anticipation notes on Tuesday. The deal is rated AA-plus by Fitch Ratings.

Since 2006, the board has sold $4 billion of securities, with the largest issuance occurring in 2012, when it sold $1.19 billion. It did not sell any bonds in 2008 or 2015. Including Tuesday's sale, the board has issued $666 million of debt so far this year, the highest amount since 2012.

RBC Capital Markets is on the docket to price Butler County, Ohio's $210 million of Series 2016 hospital facilities revenue bonds for UC Health on Tuesday. The deal is rated A2 by Moody's and A by S&P.

Citigroup is expected to price the Salem Hospital Facilities Authority, Ore.'s $195 million of Series 2016A revenue refunding bonds for Salem Health projects. The deal is rated A-plus by S&P and Fitch.

In the competitive arena on Tuesday, the city and county of Denver, Colo., will be selling $115 million of Series 2016 wastewater enterprise revenue bonds. The deal is Aa1 by Moody's and triple-A by S&P and Fitch.

The issuer last sold comparable bonds competitively on Jan. 11. 2012, when JPMorgan Securities won $50.43 million of Series 2012 wastewater enterprise revenue bonds with a true interest cost of 2.26%.

Bond Buyer Visible Supply

The Bond Buyer's 30-day visible supply calendar increased $623.5 million to $21.34 billion on Tuesday. The total is comprised of $4.18 billion of competitive sales and $17.16 billion of negotiated deals.

 

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