Top-rated municipal bonds were unchanged at mid-session, traders said, as the first of the week's $8.84 billion of bond supply started to hit the market on Tuesday.
Secondary Market
The yield on the 10-year benchmark muni general obligation was unchanged from 1.40% on Monday, while the yield on the 30-year muni was steady from 2.11%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were narrowly mixed on Tuesday. The yield on the two-year Treasury rose to 0.75% from 0.74% on Monday, the 10-year Treasury yield gained to 1.55% from 1.54% and the yield on the 30-year Treasury bond was flat at 2.23%.
On Monday, the 10-year muni to Treasury ratio was calculated at 91.1% compared to 88.7% on Friday, while the 30-year muni to Treasury ratio stood at 94.4% versus 92.7%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 30,517 trades on Monday on volume of $8.11 billion.
The MSRB secondary volume was in line with a typical Monday pace ahead of a busy new issue week, Janney Municipal Strategist Alan Schankel wrote in a Tuesday market comment.
"Both this morning's milder, pleasant weather and the strong August new issue pace belie the summer doldrums scenario often seen in the two-week run-up to Labor Day," Schankel wrote. "We estimate this month's total primary supply will exceed $44 billion, making it the most active August in at least 30 years based on Bond Buyer data."
Primary Market
Bank of America Merrill Lynch priced the California Health Facilities Financing Authority's $446.61 million of Series 2016A revenue bonds for Providence St. Joseph Health on Tuesday.
The issue was priced to yield from 1.06% with a 5% coupon in 2022 to 2.64% with a 4% coupon in 2036; a 2041 maturity was priced as 3s to yield 3.06% and a split 2047 maturity was priced as 3s to yield 3.09% and as 4s to yield 2.76%.
The deal is rated Aa3 by Moody's Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings. It carries stable outlooks from all three agencies.
On Thursday, Ziegler is expected to price the California HFFA's $271 million of refunding revenue bonds for the Adventist Health System/West. That deal is rated A by Fitch.
Since 2006, the HFFA has sold about $17 billion of debt with the largest issuance occurring in 2009 when it sold about $2.33 billion of bonds. The authority sold the least amount of debt in 2014 when it issued nearly $500 million of bonds.
Citigroup priced the Judson Independent School District, Texas' $310.99 million of Series 2016 unlimited tax school building and refunding bonds.
The issue was priced to yield from 0.61% with a 3% coupon in 2018 to 2.52% with a 4% coupon in 2036; a 2041 maturity was priced as 4s to yield 2.59% and a 2045 maturity was priced as 4s to yield 2.63%.
The deal is backed by the Permanent School Fund guarantee program and rated triple-A by Moody's and Fitch.
Goldman Sachs is expected to price the Waterworks Board of Birmingham, Ala.'s $424 million of Series 2016A, B and C water revenue refunding bonds, broken into three series of tax-exempts and taxables. The deal is rated Aa3 by Moody's and AA-minus by S&P.
Goldman is also set to price the Illinois Municipal Power Agency's $250 million of Series 2016A power project revenue bonds for the Prairie State Project. The deal is rated A2 by Moody's and A-minus by S&P.
Piper Jaffray is set to price Phoenix, Ariz.'s $232 million of Series 2016 general obligation refunding bonds. The deal is rated Aa1 by Moody's and AA-plus by S&P.
Morgan Stanley tentatively priced the New Jersey Educational Facilities Authority's $105.33 million of Series 2016G taxable revenue refunding bonds for the College of New Jersey. The deal was priced at par to yield from about 72 basis points over the comparable Treasury security in 2020 to around 190 basis points over the comparable Treasury in 2032 and 140 basis points over the comparable Treasury in 2034. The deal is rated A2 by Moody's, A by S&P and AA-minus by Fitch.
Wells Fargo Securities received the award on the Deschutes County, Ore., Hospital Facilities Authority's $108.3 million of tax-exempt and taxable hospital revenue bonds for the St. Charles Health System.
The $101.27 million of tax-exempts were priced to yield from 0.58% with a 3% coupon in 2017 to 2.81% with a 4% coupon in 2035. A 2045 maturity was priced as 3 1/4s to yield 3.26%, a 2046 maturity was priced as 4s to yield 3.01% and a 2048 maturity was priced as 5s to yield 2.67%. The $7.04 million of taxables were priced at par to yield from 1.375% in 2017 to 2.74% in 2023. The deal was rated A2 by Moody's and A-plus by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $381.3 million to $14.11 billion on Tuesday. The total is comprised of $5.12 billion of competitive sales and $8.99 billion of negotiated deals.
