The Other Shoe Drops: Rest of Week's Issuance Lies Ahead

A day after Chicago grabbed all the headlines, municipal bond traders will be looking at the rest of the week's new issuance, which is set to come to market.

Primary Market

After the Windy City and Keystone State deals, the market is ready to take on the last of the week's big issues, with the St. Paul Housing and Redevelopment Authority's $494 million of health care facilities revenue refunding bonds leading the pack.

Piper Jaffray is slated to price the deal, which is rated A2 by Moody's Investors Service and A by Standard & Poor's.

Citi is expected to price the Miami-Dade County School Board's $461 million of certificates of participation. The deal is rated A1 by Moody's and A by S&P.

The Montgomery County Industrial Development Authority, Pa., will be coming to market with $455 million of health system revenue bonds to be priced by Bank of America Merrill Lynch. The issue is rated Baa2 by Moody's and BBB by S&P.

And Morgan Stanley is expected to price the Massachusetts Educational Financing Authority's $185 million of revenue bonds.

In the competitive arena, Orange County, Fla., will offer $170 million of Series 2015 tourist development tax refunding revenue bonds. The issue is rated Aa3 by Moody's AA-minus by S&P and AA by Fitch.

The county last sold bonds competitively on Sept. 6, 2012, when Raymond James won $96.2 million of Series 2012C sales tax revenue refunding bonds with a true interest cost of 1.97%.

Also, two New Jersey issuers will be in the market: Atlantic City and Trenton.

Atlantic City will offer $12 million of Series 2015B GOs under the state of New Jersey's Municipal Qualified Bond Act, which is intended to facilitate distressed municipal issuers' access to the capital markets. The issue is rated A-minus by S&P.

The city last sold comparable bonds competitively on Nov. 26, 2013, when Bank of America Merrill Lynch won $62.88 million of Series 2013 GOs and tax appeal refunding bonds with a TIC of 4.17%

Trenton will offer two separate competitive sales totaling $12.39 million, consisting of $10.52 million general improvement, water utility and sewer utility bonds and $1.88 million school bonds. Both sales are rated Baa1 by Moody's.

Trenton last sold comparable bonds competitively on Feb. 5, 2014, when UBS Financial Services won $9.88 million of taxable GOs issued under the MQBA with a TIC of 4.53%.

Secondary Market

Treasury prices were little changed on Thursday as the yield on the two-year Treasury note was flat at 0.65% from Wednesday, while the 10-year yield was unchanged at 2.14% and the 30-year yield was down to 2.87% from 2.89%.

The yield on the 10-year benchmark muni general obligation on Wednesday finished unchanged from 2.25% on Tuesday, while the yield on the 30-year GO fell two basis points to 3.21% from 3.23%, according to the final read of Municipal Market Data's triple-A scale.

The 10-year muni to Treasury ratio was calculated on Wednesday at 105.4% versus 105.3% on Tuesday, while the 30-year muni to Treasury ratio stood at 111.6% compared to 111.6%, according to MMD.

Tax-Exempt Money Market Funds Post Outflow

Tax-exempt money market funds experienced outflows of $179.4 million, bringing total net assets to $245.18 billion in the period ended May 25, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $842.5 million to $245.36 billion in the previous week.

The average, seven-day simple yield for the 395 weekly reporting tax-exempt funds remained at 0.01% for a 108th straight week.

The total net assets of the 995 weekly reporting taxable money funds rose $1.87 billion to $2.395 trillion in the period ended May 26, after experiencing an inflow of $16.58 billion to $2.393 trillion in the prior week.

The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 19th consecutive week.

Overall, the combined total net assets of the 1,388 weekly reporting money funds increased $1.69 billion to $2.640 trillion in the period ended May 26, which followed an inflow of $17.42 billion to $2.638 trillion in the prior period.

Bond Buyer Visible Supply

The Bond Buyer's 30-day visible supply calendar decreased $1.85 billion to $11.49 billion on Wednesday. The total is comprised of $5.77 billion competitive sales and $5.72 billion of negotiated deals.

MSRB Previous Session's Activity

The Municipal Securities Rulemaking Board reported 44,522 trades on Wednesday on volume of $10.707 billion.

The most active bond, based on the number of trades, was the Riverside County Public Financing Authority, Calif.'s Series 2015 capital facilities project lease revenue bonds 4 1/8s of 2040, which traded 227 times at an average price of 100.05 with an average yield of 4.103%. The bonds were initially priced at 97.308 to yield 4.30%.

For reprint and licensing requests for this article, click here.
MORE FROM BOND BUYER