Municipal bond traders are preparing for this week's new issue calendar, which is estimated at $7.83 billion, consisting of $4.94 billion of negotiated deals and $2.89 billion of competitive sales.
Secondary Market
Treasury prices were mixed. The yield on the two-year Treasury slipped to 0.93% from 0.94% on Friday while the 10-year Treasury yield inched up to 2.28% from 2.27% and the 30-year rose to 3.02% from 3.00%.
On Friday, top-rated municipal bonds finished stronger. The yield on the 10-year benchmark muni general obligation was down one basis point to 2.01% from 2.02% on Thursday, while the 30-year yield was off one basis point 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 Friday at 88.4% from 86.9% on Thursday, while the 30-year muni to Treasury ratio stood at 98.3% compared to 96.8%, according to MMD.
Primary Market
In the competitive arena on Monday, King County, Wash., is selling $175.74 million of Series 2015E limited tax general obligation refunding bonds. The issue is rated Aa1 by Moody's Investors Service, triple-A by Standard & Poor's and AA-plus by Fitch Ratings.
The last time the county competitively sold comparable bonds was on Oct. 19 when Citigroup won $50.6 million of Series 2015 GOLT and refunding bonds with a true interest cost of 3.06%.
On Tuesday, the Empire State Development Corp. will offer about $1.1 billion of personal income tax revenue bonds in four separate competitive sales for the New York State Urban Development Corp.
The deals consist of $404.73 million of Series 2015A Group B bonds; $386.64 million of Series 2015A Group B bonds; $237.56 million of Series 2015B taxable bonds; and $114.66 million of Series 2015A Group C bonds. All four sales are rated Aa1 by Moody's.
The last time the ESDC competitively sold comparable tax-exempt bonds was on Dec. 2, 2014, when JPMorgan won $414.860 million of Series 2014A Group A PIT bonds with a TIC of 1.82%; ESDC last sold comparable taxable bonds on Dec. 2, 2014, when Goldman Sachs won $370.82 million of Series 2014B bonds.
In the negotiated sector on Tuesday, Citi is expected to price the Indiana Municipal Power Agency's $385 million of power supply system revenue bonds. The deal is rated A1 by Moody's and A-plus by both S&P and Fitch.
Also on Tuesday, RBC Capital Markets is expected to price the Illinois State Toll Highway Authority's $340 million of senior revenue refunding bonds. The deal is rated AA-minus by Fitch.
On Wednesday, Clemson University in South Carolina will be selling two separate competitive issues totaling $210.8 million. The larger deal is $191 million of Series 2015B higher education revenue bonds while the other issue is $19.8 million of Series 2015B athletic facilities revenue bonds. The timing couldn't be more perfect as the Tigers football program is one of two undefeated teams left in college football, going into its conference championship game.
The university last sold bonds competitively on May 5, when Citi won $64.385 million with a TIC of 3.73%.
On Thursday, Morgan Stanley is expected to price the New Jersey Healthcare Facilities' $266.715 million of revenue and refunding bonds. The deal is rated triple-B by Fitch.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 31,484 trades on Friday on volume of $5.39 million.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $559.3 million to $9.99 billion on Monday. The total is comprised of $3.38 billion competitive sales and $6.60 billion of negotiated deals.
Last Week's Most Actively Traded Issues
Revenue bonds comprised 54.60% of new issuance in the week ended Dec. 4, down from 55.47% in the previous week, according to Markit. General obligation bonds comprised 37.77% of total issuance, up from 37.38%, while taxable bonds made up 7.63%, up from 7.15%.
Some of the most actively traded issues by type in the week ended Dec. 4 were in New Jersey, Puerto Rico and Texas, according to Markit.
In the revenue bond sector, the New Jersey Transportation Trust Fund Authority 4 3/4s of 2038 were traded 59 times. In the GO bond sector, the Puerto Rico commonwealth 8s of 2035 were traded 55 times. And in the taxable bond sector, the University of Texas 3.78s of 2045 were traded 16 times, Markit said.
