Top-rated municipal bonds were stronger at mid-session, traders said, as the first of the week's new issues started to come to market.
Secondary Market
The yield on the 10-year benchmark muni general obligation dropped one to three basis points from 1.51% on Monday, while the yield on the 30-year dropped as much as two basis points from 2.30%, according to a read of Municipal Market Data's triple-A scale.
Treasuries were narrowly mixed on Tuesday. The yield on the two-year Treasury was unchanged from 0.74% on Monday, the 10-year Treasury yield dropped to 1.56% from 1.59% and the yield on the 30-year Treasury bond decreased to 2.28% from 2.33%.
On Monday, the 10-year muni to Treasury ratio was calculated at 95.1% compared to 94.1% on Friday, while the 30-year muni to Treasury ratio stood at 98.9% versus 98.3%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 32,765 trades on Monday on volume of $9.20 billion.
Primary Market
Ramirez & Co. priced the Los Angeles Community College District, Calif.'s $180.75 million of Series 2016 general obligation refunding bonds.
The issue was priced to yield from 0.80% with a 4% coupon in 2018 to approximately 3.03% in 2039. A 2017 maturity was offered as a sealed bid.
The deal is rated Aa1 by Moody's Investors Service and AA-plus by S&P Global Ratings.
In the competitive arena on Tuesday, Hennepin County, Minn., offered two separate issues totaling $155.32 million.
Citigroup won the $95 million of Series 2016B GOs with a true interest cost of 2.77%. The issue was priced as 5s to yield from 0.78% in 2017 to 2.20% in 2036.
Citi also won the $60.32 million of Series 2016C GO refunding bonds with a TIC of 1.47%. The issue was priced as 5s to yield from 0.78% in 2017 to 1.83% in 2028.
The deals are rated triple-A by S&P and Fitch Ratings.
The county last competitively sold comparable bonds on June 23, when BAML won $104.29 million of Series 2016A GOs with a true interest cost of 2.93%.
Since 2006, the county has issued about $1.7 billion of bonds, with the most issuance occurring in 2008 when it sold about $349 million of securities. The county did not come to market in 2015.
Bank of America Merrill Lynch received the written award on the Rancho California Water District's $104.5 million of tax-exempt and taxable revenue and refunding bonds. The issue was comprised of $30.64 million of Series 2016A tax-exempt fixed-rate revenue bonds, $37.97 million of Series 2016B tax-exempt fixed-rate refunding revenue bonds, and $35.91 million of Series 2016C taxable fixed-rate refunding revenue bonds. The deal is rated triple-A by S&P and AA-plus by Fitch.
Wells Fargo Securities was slated to price the California State Public Works Board's $527.54 million of Series 2016C&D lease revenue refunding bonds, but a market source said the deal has been postponed. No other information was immediately available.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $928.8 million to $13.47 billion on Tuesday. The total is comprised of $3.36 billion of competitive sales and $10.11 billion of negotiated deals.
