Munis Flat as Market Preps for $7.2B Week

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Top-quality municipal bonds were unchanged at mid-session, according to traders, as the market prepared to take on a new issue calendar of about $7.2 billion that will hit the screens starting on Tuesday.

Secondary Market

The yield on the 10-year benchmark muni general obligation was flat from 1.52% on Friday, while the yield on the 30-year was steady from 2.30%, according to a read of Municipal Market Data's triple-A scale.

Treasuries were stronger on Monday. The yield on the two-year Treasury dipped to 0.73% from 0.75% on Friday, the 10-year Treasury yield declined to 1.58% from 1.62% and the yield on the 30-year Treasury bond decreased to 2.32% from 2.34%.

On Friday, the 10-year muni to Treasury ratio was calculated at 94.1% compared to 95.2% on Thursday, while the 30-year muni to Treasury ratio stood at 98.3% versus 98.3%, according to MMD.

MSRB: Previous Session's Activity

The Municipal Securities Rulemaking Board reported 30,734 trades on Friday on volume of $11.88 billion.

Prior Week's Actively Traded Issues

Revenue bonds comprised 56.42% of new issuance in the week ended Sept. 23, up from 53.97% in the previous week, according to Markit. General obligation bonds comprised 37.40% of total issuance, down from 38.55%, while taxable bonds made up 6.18%, down from 7.48%.

Some of the most actively traded issues by type were from California and New York issuers.

In the GO bond sector, the Centinela Valley Union High School District, Calif., 3s of 2044 were traded 33 times. In the revenue bond sector, the New York City Transitional Finance Authority 4s of 2041 were traded 48 times. And in the taxable bond sector, the University of California Medical Center pooled revenue 6.548s of 2048 were traded 12 times.

Previous Week's Top Underwriters

The top negotiated and competitive underwriters of last week included Bank of America Merrill Lynch, Citigroup, RBC Capital Markets, JPMorgan Securities and Goldman Sachs, according to Thomson Reuters data. In the week of Sept. 11-Sept. 17, BAML underwrote $2.33 billion, Citi $1.01 billion, RBC $977.4 million, JPMorgan $859.7 million and Goldman $830 million.

Primary Market

This week's calendar is composed of $5.88 billion of negotiated deals and $1.32 billion of competitive sales.

Wells Fargo Securities is slated to price the California State Public Works Board's $527.54 million of Series 2016C&D lease revenue refunding bonds for various capital projects on Tuesday. The deal is rated A1 by Moody's Investors Service and A-plus by S&P Global Ratings and Fitch Ratings.

Citigroup is expected to price the Palomar Health, Calif.'s $210 million of Series 2016A&B general obligation refunding bonds on Tuesday. The deal is rated A2 by Moody's, A by S&P and triple-A by Fitch.

Wells Fargo is set to price on Tuesday the state of California's $200 million of GO index floating rates consisting of Series 2016B new issue bonds and a Series 2013C remarketing. The deal is rated Aa3 by Moody's and AA-minus by S&P and Fitch.

Ramirez & Co. is expected to price the Los Angeles Community College District, Calif.'s $171.69 million of Series 2016 GO refunding bonds on Tuesday. The deal is rated Aa1 by Moody's and AA-plus by S&P.

Bank of America Merrill Lynch is set to price Corona-Norco Unified School District, Calif.'s $102 million Series 2016A&B GO refunding bonds on Tuesday. The deal is rated Aa2 by Moody's and AA-minus by S&P.

Keybanc Capital Markets is expected to price the state of Ohio's $100 million of Series 2016C capital facilities appropriation parks and recreation improvement bonds on Tuesday. The deal is rated Aa2 by Moody's and AA by S&P and Fitch.

In the competitive arena on Tuesday, Hennepin County, Minn., is offering two separate issues totaling $155.32 million. The deals consist of $95 million of Series 2016B GOs and $60.32 million of Series 2016C GO refunding bonds. The deals are rated triple-A by S&P and Fitch.

The biggest negotiated deal of the week will coming from the Aloha state on Thursday. Citi is set to price Hawaii's $676 million of general obligation, GO refunding and taxable GO bonds. The deal is rated Aa1 by Moody's and AA-plus by S&P; Fitch affirmed the state at AA.

Also on Thursday, Morgan Stanley is expected to price Massachusetts' $430.28 million of Series 2016A transportation fund revenue bonds for rail enhancement and accelerated bridge programs and Series 2016A transportation fund revenue refunding bonds. The deal is rated Aa1 by Moody's and triple-A by S&P.

Morgan Stanley is also set to price Massachusetts' $127.17 million of Series 2016A federal highway grant anticipation notes for the accelerated bridge program. The deal is rated Aa2 by Moody's.

Bond Buyer Visible Supply

The Bond Buyer's 30-day visible supply calendar decreased $1.15 billion to $12.54 billion on Monday. The total is comprised of $3.30 billion of competitive sales and $9.25 billion of negotiated deals.

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