Muni Market Set for Moderate Supply Slate

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Municipal bond traders are returning to work Monday, set to take on the week's $4.3 billion new issue calendar. They will also be keeping an eye on yields, which have been rather volatile the past few weeks.

Secondary Market

Treasuries were narrowly mixed on Monday. The yield on the two-year Treasury rose to 1.16% from 1.14% on Friday, while the 10-year Treasury yield gained to 2.33% from 2.32%, and the yield on the 30-year Treasury bond was unchanged from 2.96%.

Top-quality municipal bonds finished stronger on Friday. The 10-year benchmark muni general obligation yield fell six basis points to 2.28% from 2.34% on Thursday, while the yield on the 30-year GO dropped five basis points to 3.04% from 3.09%, according to the final read of Municipal Market Data's triple-A scale.

On Friday, the 10-year muni to Treasury ratio was calculated at 98.5% compared to 98.1% on Thursday, while the 30-year muni to Treasury ratio stood at 102.9%, versus 102.3%, according to MMD.

MSRB: Previous Session's Activity

The Municipal Securities Rulemaking Board reported 38,671 trades on Friday on volume of $10.1 billion.

Prior Week's Actively Traded Issues

Revenue bonds comprised 58.83% of new issuance in the week ended Feb. 24, up from 58.52% in the previous week, according to Markit. General obligation bonds comprised 35.35% of total issuance, down from 35.82%, while taxable bonds made up 5.82%, up from 5.66%.

Some of the most actively traded issues by type were from Ohio, New York, and Nebraska.

In the GO bond sector, the Berea City School District, Ohio, 4s of 2053 were traded 47 times. In the revenue bond sector, the New York Metropolitan Transportation Authority 2s of 2017 were traded 31 times. And in the taxable bond sector, the Omaha, Neb., Public Facilities Corp. 4.353s of 2047 were traded 22 times.

Previous Week's Top Underwriters

The top negotiated and competitive underwriters of last week included Citigroup, Bank of America Merrill Lynch, RBC Capital Markets, PNC Finances Services, and Morgan Stanley, according to Thomson Reuters data.

In the week of Feb. 19 to Feb. 25, Citi underwrote $682.6 million, BAML $344.7 million, RBC $279.8 million, PNC $226.6 million and Morgan Stanley $225 million.

Primary Market

This week's calendar is comprised of $2.9 billion of negotiated deals and $1.4 billion of competitive sales.

Siebert Cisneros Shank is expected to price the New York City Municipal Water Finance's Authority's $375 million of Fiscal 2017 Series EE water and sewer second general resolution revenue bonds for retail investors on Monday ahead of the institutional pricing on Tuesday.

The deal is rated Aa1 by Moody's Investors Service and AA-plus by S&P Global Ratings and Fitch Ratings.

On Tuesday, Morgan Stanley is set to price the California Infrastructure and Economic Development Bank's $450 million of clean water state revolving fund revenue green bonds.

The deal is rated triple-A by S&P and Fitch.

Piper Jaffray is expected to price the Douglas County, Neb., Hospital Authority No. 2's $100 million of Series 2017 revenue bonds for Children's Hospital.

The deal is rated A1 by Moody's and AA-minus by Fitch.

Bond Buyer Visible Supply

The Bond Buyer's 30-day visible supply calendar increased $512.3 million to $10.45 billion on Monday. The total is comprised of $4.78 billion of competitive sales and $5.67 billion of negotiated deals.

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