Top-quality municipal bonds finished unchanged on Monday, traders said, ahead of a moderately sized supply calendar for the week, with volume estimated at $5.95 billion.
Secondary Market
The yield on the 10-year benchmark muni general obligation was unchanged from 1.45% on Thursday, while the yield on the 30-year muni was flat at 2.15%, according to the final read of Municipal Market Data's triple-A scale.
U.S. Treasuries were narrowly mixed on Monday. The yield on the two-year Treasury rose to 0.73% from 0.70% on Friday as the 10-year Treasury yield gained to 1.57% from 1.56% and the yield on the 30-year Treasury bond was unchanged from 2.29%.
The 10-year muni to Treasury ratio was calculated at 92.1% on Monday 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 26,950 trades on Friday on volume of $9.59 billion.
Prior Week's Actively Traded Issues
Revenue bonds comprised 49.51% of new issuance in the week ended July 22, down from 49.87% in the previous week, according to Markit. General obligation bonds comprised 39.24% of total issuance, up from 38.93%, while taxable bonds made up 11.25%, up from 11.20%.
Some of the most actively traded issues by type in the week ended July 22 were from Connecticut, New York and California issuers. In the GO bond sector, the Greenwich, Conn., 2s of 2017 were traded 22 times. In the revenue bond sector, the NYC MTA 5s of 2056 were traded 39 times. And in the taxable bond sector, the California 7.6s of 2040 were traded 33 times.
Previous Week's Top Underwriters
The top negotiated and competitive underwriters of last week included Morgan Stanley, Wells Fargo Securities, JPMorgan Securities, Citigroup and Bank of America Merrill Lynch, according to Thomson Reuters data. In the week of July 17-23, Morgan Stanley underwrote $1.99 billion, Wells Fargo $1.00 billion, JPMorgan $973.8 million, Citi $487.1 million, and BAML $484.9 million.
Primary Market
The primary will continue issuing bonds in a low rate environment even as the Federal Open Market Committee gathers in Washington for its two-day monetary policy meeting. The Federal Reserve is expected to stand pat when it announces its decision on 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, BBB-minus by S&P and BBB by Fitch.
Also on Tuesday, Citigroup is set to price Tennessee's $363 million of taxable and tax-exempt general obligation bonds. 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 include $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.
N.Y. MTA Plans $1B Hudson Yards Bond Sale
The New York Transportation Authority is planning to sell about $1 billion of Series 2016A Hudson Rail Yards trust obligations next month, the MTA announced at a finance committee meeting on Monday.
Proceeds of the sale will be used "to finance existing approved trust and commuter projects and to pay other financing costs associated with the monetization of the Hudson Rail Yard ground leases."
Earlier this month, the full MTA board authorized the bond offering to monetize a portion of the 99-year lease payments from Hudson Rail Yards commercial and residential development. The MTA would offer the obligations under a trust agreement with Wells Fargo Bank as custodian, most likely as a 40-year bond.
The MTA is one of the largest municipal issuers with nearly $37 billion of debt.
