Municipal bond traders are set to see some of the biggest deals of the week come to market on Tuesday ahead of the two-day monetary policy meeting of the Federal Open Market Committee.
Secondary Market
U.S. Treasuries were mostly stronger on Tuesday morning. The yield on the two-year Treasury rose to 0.76% from 0.73% on Monday as the 10-year Treasury yield dipped to 1.56% from 1.57% and the yield on the 30-year Treasury bond slid to 2.28% from 2.29%.
Top-quality municipal bonds finished unchanged on Monday. The yield on the 10-year benchmark muni general obligation was unchanged from 1.45% on Friday, while the yield on the 30-year muni was flat from 2.15%, according to the final read of Municipal Market Data's triple-A scale.
On Monday, the 10-year muni to Treasury ratio was calculated at 92.1% compared to 92.6% on Friday, while the 30-year muni to Treasury ratio stood at 93.8% versus 94.1%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 29,846 trades on Monday on volume of $7.426 billion.
Primary Market
The primary will be continuing to issue bonds in this low rate environment even as the FOMC gathers in Washington. The Federal Reserve is expected to stand pat when it announces its decision of Wednesday, leaving any interest rate hike until a future meeting.
This week's calendar is made up of $5.03 billion of negotiated deals and $910.5 million of competitive sales.
On Tuesday, JPMorgan Securities is expected to price the Illinois Finance Authority's $972.58 million of Series 2016C revenue bonds for the Presence Health Network. The deal is rated Baa3 by Moody's Investors Service, BBB-minus by S&P Global Ratings and BBB by Fitch Ratings.
Also on Tuesday, Citigroup is set to price Tennessee's $363 million of taxable and tax-exempt general obligation bonds.
Since 2006, the state of Tennessee has issued about $3.2 billion of debt, with the largest issuance occurring in 2009 when it sold $680 million of securities. The Volunteer State is a steady issuer, coming to market every year since 2006 with the exception of 2013 and have never brought more than $1 billion to market in a given year.
The deal is rated triple-A by Moody's and S&P.
Morgan Stanley is expected to price the Rhode Island Health and Educational Building Corp.'s $266.82 million of Series 2016 hospital financing revenue refunding bonds for the Lifespan Obligated Group.
And Goldman Sachs is set to price Ohio's $217.19 million of major new state infrastructure project revenue bonds. The deal is rated Aa2 by Moody's and AA by S&P.
In the competitive sector on Tuesday, Miami-Dade County, Fla., is selling two separate issues totaling $212.99 million.
The deals consist of $185.37 million of Series 2016B capital asset acquisition special obligation refunding bonds and $27.62 million of Series 2016A capital asset acquisition special obligation bonds.
Both deals are rated Aa3 by Moody's and AA-minus by S&P.
It was also announced late on Monday the Florida Board of Education will competitively sell $213.1 million of lottery revenue refunding bonds. The deal is rated A1 by Moody's, AAA by S&P and AA by Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $641.7 million to $12.44 billion on Tuesday. The total is comprised of $4.37 billion of competitive sales and $8.07 billion of negotiated deals.
