Munis Strengthen as Market Supply Trickles In

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Top-rated municipal bonds were stronger at mid-session, traders said, as U.S. Treasuries turned mixed.

Secondary Market

The 10-year benchmark muni general obligation yield fell by as much as two basis points from 2.37% on Tuesday, while the yield on the 30-year GO dropped as much as two basis points from 3.11%, according to a read of Municipal Market Data's triple-A scale.

Treasuries were mixed on Wednesday. The yield on the two-year Treasury rose to 1.22% from 1.20% on Tuesday, while the 10-year Treasury was unchanged from 2.43%, and the yield on the 30-year Treasury bond increased to 3.05% from 3.04%.

On Tuesday, the 10-year muni to Treasury ratio was calculated at 97.7% compared to 97.9% on Friday, while the 30-year muni to Treasury ratio stood at 102.4%, versus 102.8%, according to MMD.

MSRB: Previous Session's Activity

The Municipal Securities Rulemaking Board reported 42,487 trades on Tuesday on volume of $7.47 billion.

Primary Market

New issue volume this week is estimated at $3.61 billion, comprised $2.08 billion of negotiated deals and $1.53 billion of competitive sales.

JPMorgan Securities priced the Michigan State Hospital Finance Authority's $178.52 million of refunding and project revenue bonds for Ascension Health Senior Credit Group on Wednesday.

The $95.545 million of Series 2010F-2 bonds were priced at par with a 2% coupon in a bullet 2047 maturity, with a mandatory tender date of April 1, 2021.

The $82.975 million of Series 2010F-5 bonds were priced at par with a 2.5% coupon in a bullet 2047 maturity, with a mandatory tender date of March 15, 2023.

The deal is rated Aa2 by Moody's Investors Service and AA-plus by S&P Global Ratings and Fitch Ratings.

Also this week, Citigroup is expected to price Alabama State Port Authority's $281 million of dock facilities revenue refunding bonds that will feature taxables, alternative-minimum tax and non-AMT bonds.

The underlying ratings are A-minus by S&P and Fitch. At least part of the deal will be insured by Assured Guaranty, which is rated AA by S&P.

Citi is also set to price California Educational Facilities Authority's $184 million of revenue bonds for Loma Linda University which features taxables and tax-exempts.

The deal is rated Baa1 by Moody's and A by S&P.

Since 2007, the California EFA has sold about $5.15 billion of bonds, with the most issuance coming in 2007 when it offered roughly $847 million.

On Thursday, the state of Delaware will competitively sell $225 million of general obligation bonds. The deal is rated triple-A by Moody's, S&P and Fitch.

Miami-Dade County will competitively sell $176.93 million of transit system sales surtax revenue refunding bonds on Thursday. The deal is rated AA by S&P and Fitch.

The Port of Seattle will competitively to sell $129.94 million of limited tax GO bonds on Thursday. The deal is rated triple-A by Moody's and S&P and AA-minus by Fitch.

The Lancaster County School District, S.C., will competitively sell $125 million of Series 2017 GOs on Thursday. The deal is rated Aa1 by Moody's and AA by S&P.

NYC MWFA Sets $375M Bond Sale

The New York City Municipal Water Finance Authority announced on Tuesday that it is planning to sell $375 million of tax-exempt fixed-rate refunding bonds in a negotiated deal on Tuesday, Feb. 28, after holding a one-day retail order period on Monday, Feb. 27.

The bonds will be sold through the authority's underwriting syndicate, led by book-running senior manager Siebert Cisneros Shank & Co. Barclays Capital and Raymond James will be co-senior managers.

Bond Buyer Visible Supply

The Bond Buyer's 30-day visible supply calendar decreased $105 million to $9.17 billion on Wednesday. The total is comprised of $4.29 billion of competitive sales and $4.88 billion of negotiated deals.

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