Prices of top-quality municipal bonds were weaker at mid-session, traders said, with yields on some maturities strengthening by as much as three basis points.
In the primary sector, traders were awaiting more supply while they kept watch as the Federal Open Market Committee meets to discuss monetary policy.
A Fed announcement on interest rates is set for Wednesday afternoon, although most analysts expect rates will remain unchanged, for now.
Secondary Market
The yield on the 10-year benchmark muni general obligation on Wednesday was up one to three basis points from 2.20% on Tuesday, while the yield on the 30-year GO was up by as much as two basis points from 3.14%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were lower on Wednesday, with the yield on the two-year Treasury note rising to 0.70% from 0.67% on Tuesday, while the 10-year yield rose to 2.29% from 2.25% and the 30-year yield increased to 2.99% from 2.96%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 99.2% versus 95.8% on Monday, while the 30-year muni to Treasury ratio stood at 106.0% compared to 105.0%, according to MMD.
Primary Market
Retail orders on are being taken for New York City's $750 million of Fiscal 2016 Series A&B general obligation bonds.
Siebert Brandford Shank priced the Big Apple bonds on Tuesday for mom and pop investors ahead of the institutional pricing on Thursday.
The $640.2 million of Series A bonds were priced to yield from 1% with 5% and 3% coupons in a split 2018 maturity to 2.70% with a 5% coupon in 2026; a 2017 maturity was offered as a sealed bid. No retails orders were taken in the 2027 through 2030 maturities.
The $109.8 million of Series B bonds were priced to yield from 1% with a 4% coupon in 2018 to 3.54% with a 3.5% coupon in 2035; the 2016 and 2017 maturities were offered as sealed bids.
The issue was rated Aa2 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings.
Barclays Capital priced Harris County, Texas' $193.51 million of Series 2015A permanent improvement and refunding bonds.
The bonds were priced to yield from 0.73% with a 4% coupon in 2017 to 1.51% with a 5% coupon in 2020. The bonds were also priced as 5s to yield 2.06% in 2022 and 2.21% in 2023 and from 2.47% in 2025 to 3.22% in 2037. A 2040 term was priced as 5s to yield 3.31%; the 2016 maturity was offered as a sealed bid. The issue is rated triple-A by S&P and Fitch.
Morgan Stanley priced Cincinnati, Ohio's $211.8 million of water system revenue and revenue refunding bonds consisting of $47.12 million of Series 2015A, $76.09 million of Series 2015B, and $88.59 million of Series C bonds. The issue is rated triple-A by Moody's and S&P.
The Series A tax-exempt bonds were priced to yield from 2.04% with a 2.375% coupon in 2022 to 3.22% with a 5% coupon in 2037. A 2040 term bond was priced as 5s to yield 3.33% and a split 2045 term was priced as 4s to yield 4.10% and as 5s to yield 3.41%.
The Series B tax-exempt bonds were priced to yield from 2.04% with a 5% coupon in 2022 to 3.40% with a 4% coupon in 2032.
The Series C taxable bonds were priced at par to yield from 0.75% in 2016 to 2.768% in 2022. The top yield in the 2022 maturity was 75 basis points above the comparable Treasury security.
On Thursday's competitive slate, Columbus, Ohio, plans nearly $319 million of bonds in three separate sales.
The offerings consist of $230.66 million of Series 2015A unlimited tax various purpose bonds, $74.69 million of Series 2015B limited tax various purpose bonds, and $13.64 million of Series 2015C taxable limited tax various purpose bonds. The issues are rated triple-A by Moody's, S&P and Fitch.
Also on Thursday, JPMorgan will price the Michigan State Building Authority's $990 million of Series 2015 I revenue and revenue refunding bonds.
The issue, tentatively structured as serials running from 2015 through 2050, is rated Aa3 by Moody's, A-plus by S&P and AA-minus by Fitch.
Since 1995, the Michigan State Building Authority has issued roughly $8.94 billion of debt. The years of 2003 and 2005 saw the most issuance with $1.05 billion and $1.07 billion, respectively. The authority did not come to market at all in 2010, 2012 and 2014.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 36,914 trades on Tuesday on volume of $6.237 billion.
The most active bond, based on the number of trades, was the Miami Beach, Fla., Series 2015 stormwater revenue 4s of 2045, which traded 124 times at an average price of 99.445, an average yield of 4.027%. The bonds were initially priced at 97.433 to yield 4.15%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $1.21 billion to $10.71 billion on Wednesday. The total is comprised of $3.86 billion competitive sales and $6.85 billion of negotiated deals.
