The market is back up and running after taking Columbus Day off and the action is expected to get started in the primary on Tuesday as the Dormitory Authority of the State of New York will be selling three issues competitively.
Secondary Trading
Treasury prices were higher in early trading, with the yield on the two-year Treasury falling to 0.62% from 0.64% from Friday, while the 10-year yield fell to 2.05% from 2.10% and the 30-year yield decreased to 2.87% from 2.93%.
On Friday, the yield on the 10-year benchmark muni general obligation rose one basis point to 2.05% from 2.04% on Thursday, while the 30-year GO was one basis point higher at 3.10% from 3.09%, according to the final read of the Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Friday at 97.8% versus 97.0% on Thursday, while the 30-year muni to Treasury ratio stood at 105.9% compared to 105.1%, according to MMD.
Primary Market
The market will see an estimated $4.2 billion of negotiated deals and $2.4 billion of competitive sales this week.
The first action will take place later in the day when DASNY will sell roughly $951.25 million in three separate sales. The Series 2015B state sales tax revenue bonds consist of $296.22 million of Group A bonds, $502.91 million of Group B bonds and $152.12 million of Group C bonds.
With the short week, most of the action is jammed into Wednesday and Thursday.
On Wednesday, Piper Jaffray is set to price the Texas Public Finance Authority’s $370 million of GO and refunding taxable bonds. The deal is expected to mature serially from 2016-2035 and is rated triple-A by Moody’s Investors Service and Standard & Poor’s.
Bank of America Merrill Lynch is expected to price Hawaii’s $747 million of Series 2015 general obligation bonds, Series ET, EU, EV, EW, EX, EY, EZ and FA; the EU series are green bonds. A retail order period will take place on Wednesday, with the institutional pricing set for Thursday. The deal is rated triple-A by Moody’s and AA by Fitch Ratings.
Previous Week's Most Actively Traded Issues
Revenue bonds comprised 57.34% of new issuance in the week ended Oct. 9 up from 56.13% in the previous week, according to Markit. General obligation bonds comprised 34.48% of total issuance, down from 36.05%, while taxable bonds made up 8.18%, up from 7.82%
Some of the most actively traded issues in the week were in Colorado, California and Washington.
In the revenue bond sector, the Colorado Health Facility Authority 4s of 2045 were traded 97 times. In the GO bond sector, California 5s of 2045 were traded 32 times. And in the taxable bond sector, the Grant County, Wash., Public Utility District No. 2’s Priest Rapids Hydro Electric 4.584s of 2040 were traded 17 times, Markit said.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 2,846 trades on Monday on volume of $115 million.
