Top-rated municipal bonds were stronger at mid-session, traders said, with yields on some maturities weaker by as much as one basis point.
Traders are looking ahead to the upcoming week's $6.72 billion of new supply, which consists of $4.63 billion of negotiated deals and $2.09 billion of competitive sales, according to calculations from Ipreo. This is up from a total of $388.3 million for this week, according to revised data from Thomson Reuters, which was made up of $261.3 million of negotiateds and $127 million of competitives.
While the market has a full day on Wednesday, and will be open for an abbreviated session on Friday, nobody expects much of anything to happen. The primary market will be deathly quiet until the new week, as there are no major deals scheduled Wednesday or on Friday.
Secondary Market
The yield on the 10-year benchmark muni general obligation on Wednesday was as much as one basis point weaker from 2.04% on Tuesday, while the 30-year yield was off as much as one basis point from 2.98%, according to a read of Municipal Market Data's triple-A scale.
Yields on the week were lower. On Wednesday, Nov. 18, the yield on the 10-year muni stood at 2.11% while the 30-year yield was at 3.07%.
"Year-end investing caused steady performance for munis over the past week. There still were occasional trades that looked like a reach but not all trades looked stronger," MMD Senior Market Analyst Randy Smolik said in a market comment. "Some holiday apathy was surfacing which may be dampening buyer enthusiasm. The drop in ratios to Treasuries could also be encouraging dealers to pare positions down as we head into a healthy underwriting week where tax-exempt issuance could approach $6.5 billion versus a $7 billion weekly 2015 average."
Treasury yields were little changed on Wednesday. The two-year Treasury yield rose to 0.94% from 0.93% on Tuesday while the 10-year Treasury yield was flat from 2.24% and the 30-year yield slipped to 2.99% from 3.00%.
The 10-year muni to Treasury ratio was calculated on Tuesday at 91.2% from 91.3% on Monday, while the 30-year muni to Treasury ratio stood at 99.3% compared to 99.8%, according to MMD.
Most Actively Quoted Issues
Illinois, New York and New Jersey and California were some of the most actively quoted names in the period from Nov. 19 to Nov. 25, according to data released by Markit.
On the bid side, the Illinois taxable 5.1s of 2033 were quoted by 11 unique dealers. On the ask side, the Port Authority of New York & New Jersey revenue 5s of 2041 were quoted by 16 dealers. And among two-sided quotes, the California taxable 7.6s of 2040 were quoted by 25 dealers, Markit said.
Most Actively Traded Issues
Some of the most actively traded issues in the period from Nov. 19 to Nov. 25 were in New York, Connecticut and California, according to Markit.
In the revenue bond sector, the New York City Municipal Water Finance Authority 5s of 2046 were traded 163 times. In the GO bond sector, the Connecticut 3 1/4s of 2029 were traded 93 times. And in the taxable bond sector, the City of Industry, Calif.'s 5.125s of 2051 were traded 85 times, Markit said.
Primary Market
RBC Capital Markets received the official award on the Minnesota Housing Finance Agency's $136.45 million of Series E and F residential housing bonds and $1.7 million of Series D rental housing bonds for Woodland Village.
The $96.93 million of Series 2015E bonds subject to the alternative minimum at were priced at par to yield from 0.60% in 2016 to 2.65% in 2023; a 2046 maturity was priced as 3 1/2s to yield approximately 2.29%. The $39.52 million of Series 2015F non-AMT bonds were priced at par to yield from 2.35% and 2.40% in a split 2023 maturity to 2.90% and 2.95% in a split 2026 maturity; a 2029 maturity was priced at par to yield 3.30%. The Series D bonds were priced at par to yield 0.75% in 2017.
All bonds were rated Aa1 by Moody's Investors Service and AA-plus by Standard & Poor's.
There were no major bond deals scheduled for Wednesday or on Friday. However, the upcoming week will be filled with new deals, both competitive and negotiated.
Topping the negotiated slate is the Kansas Department of Transportation's $400 million of Series 2015B highway revenue bonds scheduled to be priced by Morgan Stanley. The deal is rated Aa2 by Moody's Investors Service, triple-A by Standard & Poor's and AA-plus by Fitch Ratings.
Morgan Stanley is also expected to price the Regents of the University of Michigan's $312 million of Series 2015 revenue bonds on Wednesday. The issue is rated triple-A by Moody's and S&P.
RBC Capital Markets is set to price the Pennsylvania Turnpike Commission's $302 million of Series 2015B turnpike revenue bonds on Tuesday. The deal is rated A1 by Moody's and A-plus by Fitch.
Bank of America Merrill Lynch is set to price the Dormitory Authority of the State of New York's $292 million of Series 2015B dormitory facilities revenue bonds for retail investors on Tuesday ahead of the institutional pricing on Wednesday. The DASNY bond are rated Aa3 by Moody's and A-plus by Fitch.
Leading the competitive pack are two separate sales of general obligation bonds from Massachusetts totaling $550 million. On Tuesday, the Bay State will sell $400 million of consolidated loan of 2015 Series E and $150 million of consolidated loan of 2015 Series D bonds. Both issues are rated Aa1 by Moody's and AA-plus by S&P and Fitch.
On tap for Wednesday, the Maryland Department of Transportation will competitively sell $325 million of Series 2015, Third Issue, consolidated transportation bonds. The issue is rated Aa1 by Moody's, triple-A by S&P and AA-plus by Fitch.
In the short-term competitive arena, the New York Metropolitan Transportation Agency's $700 million of bond anticipation notes in six separate sales of $12 million each and one sale of $628 million on Wednesday. The BANs are rated MIG-1 by Moody's, SP-1-plus by S&P and F-1 by Fitch.
The District of Columbia will competitively sell $250 million of fiscal year 2016 GO tax revenue anticipation notes on Wednesday. The TRANs are rated MIG-1 by Moody's, SP-1-plus by S&P and F-1-plus by Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $2.81 billion to $10.24 billion on Wednesday. The total is comprised of $4.05 billion competitive sales and $6.19 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,543 trades on Tuesday on volume of $7.64 billion.
