The municipal bond market is bracing for the bulk of the week's new issues. While volume is down for the week, the majority of the upcoming bond sales will come to market on Tuesday.
Secondary Market
Treasury prices were lower on Tuesday as the yield on the two-year Treasury note increased to 0.54% from 0.52% on Monday, while the 10-year yield was up to 1.94% from 1.92% and the 30-year yield increased to 2.63% from 2.60%.
The yield on the 10-year benchmark muni general obligation was unchanged on Monday from 2.00% on Friday, while the yield on the 30-year GO remained at 2.90%, according to the final read of MMD's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Monday at 104.0% versus 104.3% on Friday, while the 30-year muni to Treasury ratio stood at 111.1% compared to 110.8%, according to MMD.
Primary Market
In the competitive arena Tuesday, a $218.01 million offering from the Humble Independent School District in Texas tops the calendar.
The Series 2015A unlimited tax school building and refunding bonds are backed by the Texas Permanent School fund guarantee and rated triple-A by Moody's Investors Service and Standard & Poor's.
The last time the district sold bonds competitively was on April 10, 2007, when Prager Sealy won $25 million of Series 2007A unlimited tax school building bonds with a true interest cost of 4.6243%
In the negotiated sector, a $209 million sale is on tap from the Grossmont Healthcare District in California. Goldman, Sachs is scheduled to the price the GO on Tuesday. The bonds are rated Aa2 by Moody's.
Bank of America Merrill Lynch is expected to price Nebraska's Public Power Generation Agency's Series 2015A revenue refunding bonds for the Whelan Energy Center's Unit 2. The bonds, set to come to market on Tuesday, are rated A2 by Moody's, BBB-plus by S&P and A-minus by Fitch Ratings.
And JPMorgan Securities is slated to price the New Hampshire Health and Educational Facilities Authority's $110 million of revenue bonds for the University System of New Hampshire. The issue is expected to be priced on Tuesday after a one-day retail order period. The bonds are rated Aa3 by Moody's and A-plus by S&P.
On Thursday, the state of Massachusetts is coming to market with two separate competitive sales of general obligation bonds totaling $550 million. The offerings consist of $450 million of Series B consolidated loan of 2015 GOs and $100 million of consolidated loan of 2015 GOs. The bonds are rated Aa1 by Moody's and AA-plus by S&P and Fitch.
And Siebert, Brandford, Shank is expected to price the State University of New York's Series 2015A dormitory facilities revenue bonds for institutions on Thursday after a one-day retail order period on Wednesday. The bonds are rated Aa3 by Moody's and AA-plus by S&P and Fitch.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 35,698 trades on Monday on volume of $7.484 billion.
The most active bond, based on the number of trades, was the Pennsylvania State Turnpike Commission's 2015 Subordinate Sub-Series A-1 revenue 4s of 2041, which traded 184 times at an average price of 99.72 with an average yield of 3.985%. The bonds were initially priced at 98.386 to yield 4.10%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.011 billion to $8.763 billion on Tuesday. The total is comprised of $4.131 billion competitive sales and $4.632 billion of negotiated deals.
