Traders were eyeing a flood of new deals Tuesday as issuers in Texas, Washington D.C., California and Kentucky prepared to enter the market.
Issuance slated for Tuesday is highlighted by three water specific deals, as traders await the week's two mega deals on Wednesday and Thursday.
Citi is expected to price the Texas Water Development Board's $790 million of state water implementation revenue bonds, Series 2015 A and B. The deal is rated triple-A by both S&P and Fitch Ratings.
Bank of America Merrill Lynch will price the District of Columbia Water and Sewer Authority's $350 million of public utility subordinate lien revenue bonds after a retail order period on Monday. The deal is rated Aa3 by Moody's, AA by Standard and Poor's and AA-minus by Fitch.
There are a few larger noteworthy competitive deals expected on Tuesday, from issuers from California, Kentucky and Washington.
San Francisco will be auctioning $226 million of GO bonds, while Louisville and Jefferson County Metropolitan Sewer District will sell $257.1 million of revenue bonds.
Louisville and Jefferson County Metropolitan Sewer District, will be auctioning its debt in two separate series. Series A will be $175 million of sewer and drainage system revenue bonds, and Series B will be $82.1 million of sewer and drainage system revenue refunding bonds.
The last time the district competitively sold bonds was Nov. 4, 2014, when it sold $80 million to Citi with a TIC of 3.81%.
Washington State is expected to sell $161.61 million of certificates of participation, Series 2015C, for state and local agency real and personal property.
The last time the Evergreen State sold COPs was on Sept. 24, when it sold $58.9 million to Barclays Capital with a TIC of 2.86%.
Tuesday's action will precede the mega deals that will be pricing on Wednesday and Thursday, when JPMorgan prices Chicago's O'Hare International Airport's $1.99 billion deal and Wells Fargo prices the Port Authority of New York and New Jersey's $2 billion deal.
Secondary Trading
Treasury prices were mostly weaker on Tuesday morning, with the yield on the two-year Treasury staying flat at 0.61% from Monday, while the 10-year yield climbed to 2.07% from 2.06% and the 30-year yield increased to 2.91% from 2.90%.
The yield on the 10-year benchmark muni general obligation on Monday closed three basis points higher to 2.01%, from 1.98% on Friday, while the yield on the 30-year GO was also up three basis points to 3.05%, from 3.02%, according to a final read of the Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Monday at 97.6% versus 99.9% on Friday, while the 30-year muni to Treasury ratio stood at 105.1% compared to 107.1%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 32,478 trades on Monday on volume of $3.761 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $548 million to $14.974 billion on Monday. The total is comprised of $4.040 billion competitive sales and $10.933 billion of negotiated deals.
