Municipal bonds finished stronger on Wednesday, traders said, with yields on some top-quality maturities dropping by as much as one basis point.
Full trading will resume on Monday, after an abbreviated session on Friday, when no deals were on the calendar.
Traders are looking to the upcoming week's $6.72 billion of new supply, which consists of $4.63 billion of negotiated deals and $2.09 billion of competitive sales, according to Ipreo. This is up from a total of $388.3 million for the holiday week, according to revised data from Thomson Reuters, which was made up of $261.3 million of negotiateds and $127 million of competitives.
Topping the negotiated slate is the Kansas Department of Transportation's $400 million of Series 2015B highway revenue bonds scheduled to be priced by Morgan Stanley. The deal is rated Aa2 by Moody's Investors Service, triple-A by Standard & Poor's and AA-plus by Fitch Ratings.
Morgan Stanley is also expected to price the Regents of the University of Michigan's $312 million of Series 2015 revenue bonds on Wednesday. The issue is rated triple-A by Moody's and S&P.
RBC Capital Markets is set 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.
Bank of America Merrill Lynch is set 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.
Leading the competitive pack are two separate sales of general obligation bonds from Massachusetts totaling $550 million. On Tuesday, 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 and AA-plus by S&P and Fitch.
On tap for Wednesday, the Maryland Department of Transportation will competitively sell $325 million of Series 2015, Third Issue, consolidated transportation bonds. The issue is rated Aa1 by Moody's, triple-A by S&P and AA-plus by Fitch.
In the short-term competitive arena, the New York Metropolitan Transportation Agency's $700 million of bond anticipation notes in six separate sales of $12 million each and one sale of $628 million on Wednesday. The BANs are rated MIG-1 by Moody's, SP-1-plus by S&P and F-1 by Fitch.
The District of Columbia will competitively sell $250 million of fiscal year 2016 GO tax revenue anticipation notes on Wednesday. The TRANs are rated MIG-1 by Moody's, SP-1-plus by S&P and F-1-plus by Fitch.
Secondary Market
The yield on the 10-year benchmark muni general obligation on Wednesday closed down one basis point at 2.03% from 2.04% on Tuesday, while the 30-year yield was off one basis point to 2.97% from 2.98%, according to the final read of Municipal Market Data's triple-A scale.
For the week, yields were lower by as much as 10 basis points. On Wednesday, Nov. 18, the yield on the 10-year muni stood at 2.11% while the 30-year yield was at 3.07%.
"Year-end investing caused steady performance for munis over the past week. There still were occasional trades that looked like a reach, but not all trades looked stronger," MMD Senior Market Analyst Randy Smolik said in a market comment. "Some holiday apathy was surfacing which may be dampening buyer enthusiasm. The drop in ratios to Treasuries could also be encouraging dealers to pare positions down as we head into a healthy underwriting week."
Treasury yields were little changed on Wednesday. The two-year Treasury yield was flat from 0.93% on Tuesday while the 10-year Treasury yield slipped to 2.23% from 2.24% and the 30-year yield dropped to 2.99% from 3.00%.
Most Actively Quoted Issues
Illinois, New York and New Jersey and California were some of the most actively quoted names in the period from Nov. 19 to Nov. 25, according to data released by Markit.
On the bid side, the Illinois taxable 5.1s of 2033 were quoted by 11 unique dealers. On the ask side, the Port Authority of New York & New Jersey revenue 5s of 2041 were quoted by 16 dealers. And among two-sided quotes, the California taxable 7.6s of 2040 were quoted by 25 dealers, Markit said.
Most Actively Traded Issues
Some of the most actively traded issues in the period from Nov. 19 to Nov. 25 were in New York, Connecticut and California, according to Markit.
In the revenue bond sector, the New York City Municipal Water Finance Authority 5s of 2046 were traded 163 times. In the GO bond sector, the Connecticut 3 1/4s of 2029 were traded 93 times. And in the taxable bond sector, the City of Industry, Calif.'s 5.125s of 2051 were traded 85 times, Markit said.
