Muni market quiet ahead of Fed

Register now

Wednesday’s market action is muted due to the Federal Reserve monetary policy meeting in Washington, D.C.

While most observers expect the Federal Open Market Committee not to raise interest rates when it makes its announcement at 2 p.m., ET, many municipal market participants are wary ahead of the Fed’s statement.

Secondary market
Municipal bonds were stronger on Wednesday, according to an early read of the MBIS benchmark scale. Benchmark muni yields fell as much as one basis point in the one- to 30-year maturities.

High-grade munis were also stronger with yields calculated on MBIS’ AAA scale falling by as much as one basis point all across the curve.

Additionally, municipals were stronger according to Municipal Market Data’s AAA benchmark scale, which showed yields falling as much as one basis point in the 10-year and 30-year maturities.

Treasury bonds were little changed as stocks were lower in early trade.

On Tuesday, the 10-year muni-to-Treasury ratio was calculated at 84.1% while the 30-year muni-to-Treasury ratio stood at 98.6%, according to MMD.

Primary market
This week’s calendar totals $4.26 billion, composed of $2.89 billion of negotiated deals and $1.37 billion of competitive sales.

In the negotiated sector, Raymond James & Associates is expected to price the Phoenix Industrial Development Authority’s $107 million of Series 2018A student housing and Series 2018B taxable student housing revenue refunding bonds for Arizona State University.

The deal is rated Baa3 by Moody’s Investors Service.

Morgan Stanley is set to price the Ohio Higher Educational Facility’s Series 2018 revenue refunding bonds for the Case Western Reserve University.

The deal has underlying ratings of A1 from Moody’s and AA-minus from S&P Global Ratings.

In the competitive arena, Nassau County, N.Y., is selling $91 .44 million of Series 2018A general improvement bonds.

The deal is rated A2 by Moody’s, A-plus by S&P and A by Fitch Ratings.

The last time the county competitively sold comparable bonds was on June 1, 2017, when Citigroup won the Series 2017B general improvement bonds with a true interest cost of 3.1901%.

On Thursday, Wells Fargo Securities is set to price the Dormitory Authority of the State of New York’s $606 million of Series 2018A tax-exempt and Series 2018B taxable revenue bonds for New York University.

Tuesday’s bond sales
New York:
Click here for the DASNY institutional pricing by Goldman

Click here for the DASNY retail pricing by Goldman

Bond Buyer 30-day visible supply at $9.3B
The Bond Buyer's 30-day visible supply calendar decreased $1.31 billion to $9.30 billion on Wednesday. The total is comprised of $3.66 billion of competitive sales and $5.64 billion of negotiated deals.

Previous session's activity
The Municipal Securities Rulemaking Board reported 46,456 trades on Tuesday on volume of $11.91 billion.

California, New York and Texas were the states with the most trades, with the Golden State taking 21.267% of the market, the Empire State taking 11.928% and the Lone Star State taking 9.4%

Treasury to raise $33.9B of new cash
The Treasury Department announced Wednesday it will raise $33.9 billion of new cash with its quarterly refunding, selling $17 billion 30-year bonds on May 10, $25 billion 10-year notes on May 9 and $31 billion three-year notes on May 8.

Treasury said it will increase its auction totals by $27 billion over the next three months to offset changes to the Federal Reserve’s reinvestment policy.

Treasury is planning to add a two-month bill later this year and may add a new five-year TIPs auction.

Gary Siegel contributed to this report.

Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation. Click here for a brief tour of the Workstation, or contact Vanessa Kim at 212-803-8474 for more information.

For reprint and licensing requests for this article, click here.
Primary bond market Higher education bonds Secondary bond market State of California State of New York New York State Dormitory Authority County of Nassau, NY State of Ohio State of Texas