Prices of top-rated municipal bonds were steady at mid-session, traders said, as the market prepares to take on a smaller slate of new issues this week, topped off by a $550 million sale from Massachusetts.
Secondary Market
The yield on the 10-year benchmark muni general obligation was unchanged from 2.00% on Friday, while the yield on the 30-year GO remained at 2.90%, according to a read of MMD's triple-A scale.
Treasury prices were lower on Monday as the yield on the two-year Treasury note increased to 0.52% from 0.51% on Friday, while the 10-year yield rose to 1.94% from 1.92% and the 30-year yield increased to 2.64% from 2.61%.
The 10-year muni to Treasury ratio was calculated on Friday at 104.3% versus 103.3% on Thursday, while the 30-year muni to Treasury ratio stood at 110.8% compared to 110.8%.
Primary Market
Volume is set to fall off this week, with only about $4.5 billion of bonds scheduled to be sold, about half of what came to market last week. The calendar is made up of about $2.7 billion of negotiated deals and around $1.7 billion of competitive sales.
The state of Massachusetts is coming to market on Thursday with two separate competitive sales of general obligation bonds totaling $550 million. The offerings consist of $450 million of Series B consolidated loan of 2015 GOs and $100 million of consolidated loan of 2015 GOs. Proceeds will benefit various capital purposes.
The bonds are rated Aa1 by Moody's Investors Service and AA-plus by Standard & Poor's and Fitch Ratings.
The Bay State last sold bonds by competitive bid on Dec. 17, 2014, when it auctioned various issues.
Also on the competitive slate this week is a $218.01 million offering from the Humble Independent School District in Texas.
The Series 2015A unlimited tax school building and refunding bonds will go up for bidding on Tuesday. The deal is backed by the Texas Permanent School fund guarantee and rated triple-A by Moody's and Standard & Poor's.
The last time the district sold bonds competitively was on April 10, 2007, when Prager Sealy won $25 million of Series 2007A unlimited tax school building bonds with a true interest cost of 4.6243%
Another large offering, this one in the negotiated sector, is a $209 million sale from the Grossmont Healthcare District in California. Goldman, Sachs is scheduled to the price the general obligation bonds on Tuesday. The GOs are rated Aa2 by Moody's.
Additionally, Bank of America Merrill Lynch is scheduled to price Nebraska's Public Power Generation Agency's Series 2015A revenue refunding bonds for the Whelan Energy Center's Unit 2. The bonds, slate to come to market on Tuesday, are rated A2 by Moody's, BBB-plus by S&P and A-minus by Fitch.
The Week's Most Actively Traded Issues
Among the most actively traded issues in the week ended April 24, were issuers from Chicago, Ohio and California, according to Markit.
Broken down by market sector, revenue bonds comprised 54.51% of new issuance, up from 54.22% in the prior week. General obligation bonds comprised 37.28% of total issuance, down from 37.67%, while taxable bonds made up 8.21%, up from 8.11%.
In the revenue bond sector, the Allen County, Ohio, hospital facilities 4s of 2044 were traded 93 times. In the GO bond sector, the Chicago Board of Education 5 1/4s of 2039 were traded 112 times. And in the taxable bond sector, the California 1.8s of 2020 were traded 27 times, according to Markit.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 33,953 trades on Friday on volume of $12.865 billion.
The most active bond, based on the number of trades, was the Pennsylvania State Turnpike Commission's 2015 Subordinate Sub-Series A-1 revenue 4s of 2041, which traded 284 times at an average price of 99.75 with an average yield of 4.006%. The bonds were initially priced at 98.386 to yield 4.10%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $863.8 million to $7.753 billion on Monday. The total is comprised of $3.142 billion competitive sales and $4.611 billion of negotiated deals.
