Munis Steady as Conn. GOs Priced for Retail

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Top-quality municipal bonds were flat at mid-session, traders said, as the state of Connecticut offered over $500 million of its tax-exempts to retail investors.

The yield on the 10-year benchmark muni general obligation was unchanged from 1.63% on Friday while the 30-year muni yield was steady at 2.43%, according to a 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 0.91% from 0.89% on Friday, while the 10-year Treasury yield was flat from 1.85% and the yield on the 30-year Treasury bond was unchanged from 2.64%.

The 10-year muni to Treasury ratio was calculated at 88.3% on Friday compared to 87.9% on Thursday, while the 30-year muni to Treasury ratio stood at 92.2% versus 93.0%, according to MMD.

MSRB Previous Session's Activity

The Municipal Securities Rulemaking Board reported 30,146 trades on Friday on volume of $9.41 billion.

Prior Week's Actively Traded Issues

Revenue bonds comprised 53.32% of new issuance in the week ended May 20, up from 53.27% in the previous week, according to data released by Markit.

General obligation bonds comprised 39.62% of total issuance, up from 38.98%, while taxable bonds made up 7.06%, down from 7.75%.

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

In the GO bond sector, the Puerto Rico commonwealth 8s of 2035 traded 44 times. In the revenue bond sector, the New York TDC LaGuardia 5s of 2046 traded 139 times. And in the taxable bond sector, the New York TDC LaGuardia 3.673s of 2030 traded 30 times, Markit said.

Previous Week's Top Underwriters

The top negotiated and competitive underwriters of last week included Citigroup, BAML, Piper Jaffray, Goldman Sachs and RBC Capital Markets, according to Thomson Reuters data. In the week of May 15-21, Citi underwrote $3.07 billion, BAML $2.05 billion, Piper had $986 million, Goldman did $811 million and RBC had $773 million.

Primary Market

On Monday, Bank of America Merrill Lynch priced the state of Connecticut's $512.88 million of Series 2016B general obligation refunding bonds for retail investors ahead of the institutional pricing on Tuesday.

The issue was priced to yield from 1.14% with 4% and 5% coupons in a split 2019 maturity to 2.35% with 4% and 5% coupons in a split 2027 maturity. A 2018 maturity was offered as a sealed bid.

Connecticut's GOs are rated Aa3 by Moody's Investors Service, AA-minus by S&P Global Ratings and Fitch Ratings, and AA by Kroll Bond Rating Agency.

Muni traders are set to see $7.7 billion of new issues come to market this week, with the calendar composed of $5.44 billion of negotiated deals and $2.23 billion of competitive sales.

On Tuesday, PNC Capital Markets is set to price the Pennsylvania Turnpike Commission's $545.14 million of second series of 2016 subordinate revenue refunding bonds. The deal is rated A3 by Moody's and A-minus by Fitch.

RBC Capital Markets is expected to price the Massachusetts Educational Financing Authority's $340 million of Series 2016 Issue J education loan revenue bonds, subject to the alternative minimum tax. The deal is rated AA by S&P and A by Fitch.

RBC is also set to price Miami-Dade County, Fla.'s $339.34 million of GOs for the building better communities program. The bonds are rated Aa2 by Moody's and AA by S&P.

In the competitive arena on Tuesday, Denton, Texas, is selling $112.19 million of securities in two separate sales consisting of $83.23 million of Series 2016 certificates of obligation and $28.96 million of Series 2016 GO refunding and improvement bonds. Both deals are rated AA-plus by S&P and Fitch.

The biggest deal of the week is coming from the San Diego Public Facilities Financing Authority on Wednesday. JPMorgan Securities is expected to price the $567.96 million of Series 2016A and 2016B subordinated water revenue bonds. The deal is rated Aa3 by Moody's and AA-minus by Fitch.

Bond Buyer Visible Supply

The Bond Buyer's 30-day visible supply calendar increased $36.6 million to $13.82 billion on Monday. The total is comprised of $6.82 billion of competitive sales and $6.99 billion of negotiated deals.

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