Muni Traders Set for Week's $5.96B Calendar

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Municipal bond traders are returning to their desks on Monday, looking ahead to the week's $5.96 billion new issue calendar. The slate is made up of $4.53 billion of negotiated deals and $1.43 billion of competitive sales.

Secondary Market

U.S. Treasuries were stronger on Monday. The yield on the two-year fell to 1.23% from 1.25% on Friday, while the 10-year Treasury yield dropped to 2.35% from 2.41%, and the yield on the 30-year Treasury bond decreased to 2.97% from 3.01%.

Top-shelf municipal bonds ended unchanged on Friday. The yield on the 10-year benchmark muni general obligation was steady from 2.28% on Thursday, while the 30-year GO yield was unchanged from 3.07%, 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 95.3% compared with 94.4% on Thursday, while the 30-year muni to Treasury ratio stood at 102.4%, versus 101.4%, according to MMD.

MSRB: Previous Session's Activity

The Municipal Securities Rulemaking Board reported 33,580 trades on Friday on volume of $10.16 billion.

Prior Week's Actively Traded Issues

Revenue bonds comprised 58.39% of new issuance in the week ended March 24, down from 58.69% in the previous week, according to Markit. General obligation bonds comprised 36.02% of total issuance, up from 35.64%, while taxable bonds made up 5.59%, down from 5.67%.

Some of the most actively traded issues by type were from Massachusetts, New York and Puerto Rico. In the GO bond sector, the Massachusetts 2s of 2017 were traded 23 times. In the revenue bond sector, the New York Metropolitan Transportation Authority 5s of 2017 were traded 48 times. And in the taxable bond sector, the Puerto Rico Public Buildings Authority 5.65s of 2028 were traded 20 times.

Previous Week's Top Underwriters

The top negotiated and competitive underwriters of last week included Bank of America Merrill Lynch, Citigroup, Morgan Stanley, Piper Jaffray and Stifel, according to Thomson Reuters data.

In the week of March 19 to March 25, BAML underwrote $1.15 billion, Citi $429.7 million, Morgan Stanley $393.9 million, Piper $361.3 million and Stifel $272 million.

Primary Market

The largest deal of the week is a $750 million sale from the state of Connecticut. Citigroup is set to price the $550 million of Series A general obligation bonds and $200 million of Series 2017B refunding GOs for retail investors on Monday ahead of the institutional pricing on Tuesday.

The deal is rated Aa3 by Moody's Investors Service and AA-minus by S&P Global Ratings, Fitch Ratings and Kroll Bond Rating Agency.

Citi is also slated to price San Jose, Calif.'s $641 million of refunding bonds, consisting of $487 million of Series 2017A bonds subject to the alternative minimum tax and $154 million of Series 2017B non-AMT bonds for retail investors on Monday ahead of the institutional pricing on Tuesday. The deal is rated A2 by Moody's and A-minus by S&P and Fitch.

RBC Capital Markets is expected to price the Glendale Community College District of Los Angeles County, Calif.'s $122 million of Series A election of 2016 GOs on Tuesday. The deal is rated Aa2 by Moody's and AA-minus by S&P.

RBC is also set to price the New York Metropolitan Transportation Authority's $100 million of variable-rate refunding bonds, Subseries 2002D-2A Libor floating-rate tender notes. The deal is rated A1 by Moody's and AA-minus by S&P.

In the competitive arena on Tuesday, Guilford County, N.C., is selling $196.27 million of bonds in two separate sales consisting of $169.07 million of Series 2017B public improvement GOs and $27.2 million of Series 2017A public improvement GOs.

The deals are rated triple-A by Moody's, S&P and Fitch.

Bond Buyer Visible Supply

The Bond Buyer's 30-day visible supply calendar increased $277.1 million to $10.95 billion on Monday. The total is comprised of $3.25 billion of competitive sales and $7.70 billion of negotiated deals.

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