About $2.5 billion of bonds are coming from just two issuers on Tuesday, as the market gears up for big competitive sales from New York and a large negotiated deal out of Ohio amid various other deals slated from around the country.
Treasuries were little changed on Tuesday. The yield on the two-year Treasury was steady from 1.35% on Monday, the 10-year Treasury yield dipped to 2.25% from 2.26% and the yield on the 30-year Treasury bond decreased to 2.83% from 2.84%.
Top-quality municipal bonds finished mixed on Monday. The yield on the 10-year benchmark muni general obligation was unchanged from 1.93% on Friday, while the 30-year GO yield rose one basis point to 2.73% from 2.72%, according to the final read of Municipal Market Data's triple-A scale.
On Monday, the 10-year muni-to-Treasury ratio was calculated at 85.5%, compared with 85.1% on Friday, while the 30-year muni-to-Treasury ratio stood at 96.2% versus 96.6%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 34,572 trades on Monday on volume of $7.39 billion.
Tuesday’s action is concentrated in the competitive arena, with the majority of supply coming from three issuers.
The New York City Transitional Finance Authority is selling $1.5 billion of fiscal 2018 future tax secured subordinate bonds in six separate offerings.
The sales consist of $411.88 million of Subseries A-3 tax-exempts, $407.21 million of Subseries A-2 tax-exempts, $225.95 million of Subseries A-5 taxables, $180.92 million of Subseries A-1 tax-exempts, $162.12 million of Series 1 bonds (remarketing), and $124.06 million of Subseries A-4 taxables.
The deals are rated Aa1 by Moody’s Investors Service and AAA by S&P Global Ratings and Fitch Ratings.
The Louisville and Jefferson County Metropolitan Sewer District, Ky., is selling $215.53 of sewer and drainage system revenue and revenue refunding bonds in two separate offerings.
The sales consist of $175 million of Series 2017A revenue bonds and $40.53 million of revenue refunding bonds.
The deals are rated Aa3 by Moody’s and AA by S&P.
The Virginia Public School Authority is selling $103.44 million of Series 2017B school financing refunding bonds (1997 resolution).
The deal is rated Aa1 by Moody’s and AA-plus by S&P and Fitch.
And there’s no slacking off in the negotiated sector either as JPMorgan Securities is set to price the Ohio Higher Educational Facilities Commission’s approximately $1 billion of Series 2017A tax-exempt and 2017B taxable hospital refunding revenue bonds for the Cleveland Clinic Health System Obligated Group for institutions after a one-day retail order period.
On Monday, the $824.23 million of Series 2017A tax-exempts were priced for retail to yield from 0.96% with a 3% coupon in 2019 to 3.42% with a 5% coupon in 2039. A 2043 term bond was priced as 4s to yield 3.50%.
The deal is rated Aa2 by Moody’s and AA by S&P.
Since 2007 the Ohio HEFC has sold $4.08 billion of securities. Before this year, the largest issuance in the period occurred in 2008 when it sold $696 million. The commission saw a low year of issuance in 2011 when it sold $60.8 million.
Also coming up on Tuesday, Morgan Stanley is expected to price Philadelphia’s $278.24 million of 15th Series 1198 general ordinance gas works revenue bonds.
The deal is rated A3 by Moody’s, A by S&P and BB-plus by Fitch.
Roosevelt & Cross is expected to price the city of Yonkers, N.Y.’s $149.61 million of general obligation bonds.
The deal is rated A2 by Moody’s and A by S&P.
Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar increased $636.1 million to $12.01 billion on Tuesday. The total is comprised of $6.48 billion of competitive sales and $5.53 billion of negotiated deals.