The municipal bond market was set to see the first of the week's hefty new issuance come to market on Tuesday, led off by several big competitive sales and a few notable negotiated deals.
Secondary Market
Treasury yields were little changed on Tuesday. The two-year Treasury yield inched up to 0.94% from 0.93% on Monday while the 10-year Treasury yield was flat from 2.22% and the 30-year yield was unchanged from 2.99%.
Municipal bonds closed stronger on Monday. The yield on the 10-year benchmark muni general obligation ended one basis point lower at 2.02% from 2.03% on Friday, while the 30-year yield fell one basis to 2.96% from 2.97%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Monday at 91.1% from 91.2% on Friday, while the 30-year muni to Treasury ratio stood at 99.0% compared to 99.0%, according to MMD.
Primary Market
On Tuesday, Massachusetts will offer two competitive sales of general obligation bonds totaling $550 million.
The Bay State will sell $400 million of consolidated loan of 2015 Series E and $150 million of consolidated loan of 2015 Series D bonds. Both issues are rated Aa1 by Moody's Investors Service and AA-plus by Standard & Poor's and Fitch Ratings.
RBC Capital Markets is expected to price the Pennsylvania Turnpike Commission's $302 million of Series 2015B turnpike revenue bonds on Tuesday. The deal is rated A1 by Moody's and A-plus by Fitch.
And Bank of America Merrill Lynch is slated to price the Dormitory Authority of the State of New York's $292 million of Series 2015B dormitory facilities revenue bonds for retail investors on Tuesday ahead of the institutional pricing on Wednesday. The DASNY bond are rated Aa3 by Moody's and A-plus by Fitch.
Wells Fargo Securities is set to price on Tuesday the Board of Regents of the University of Texas System's $241.89 million of bonds, consisting of $126 million of Series 2015C taxable permanent university fund bonds and $115.89 million of Series 2016A permanent university fund bonds. The issue is rated triple-A by Moody's, S&P and Fitch.
Wells Fargo is also expected to price the Metropolitan St. Louis Sewer District, Mo.'s $233.62 million of Series 2015B improvement and refunding revenue bonds. The issue is rated Aa1 by Moody's, triple-A by S&P and AA-plus by Fitch.
On Wednesday, Morgan Stanley is expected to price the Kansas Department of Transportation's $400 million of Series 2015B highway revenue bonds. The deal is rated Aa2 by Moody's, triple-A by Standard & Poor's and AA-plus by Fitch.
Since 2007, the Kansas DOT has issued about $2.2 billion of debt. The most issuance took place in 2012 and 2014 when the department sold $496 million and $463 million, respectively. The DOT did not come to market in 2011 and 2013. During the same time period, they have issued bonds roughly 1.4 times per year.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $843.6 million to $11.43 billion on Tuesday. The total is comprised of $4.67 billion competitive sales and $6.76 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 36,903 trades on Monday on volume of $5.91 million.
