California here we come — and Illinois too — as states prep bond sales

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Municipal bond buyers will be seeing almost $5 billion of bonds hit the market on Tuesday, led by big sales from California and Illinois.

Secondary market
The yield on the 10-year benchmark muni general obligation was unchanged from 1.96% on Friday, while the 30-year GO yield fell two basis points to 2.72% from 2.74%, according to the final read of Municipal Market Data's triple-A scale.

U.S. Treasuries were mostly weaker on Tuesday. The yield on the two-year Treasury remained at 1.55%, the 10-year Treasury yield gained to 2.32% from 2.31% and yield on the 30-year Treasury bond increased to 2.83% from 2.82%.

On Monday, the 10-year muni-to-Treasury ratio was calculated at 84.8% compared with 86.0% on Friday, while the 30-year muni-to-Treasury ratio stood at 96.5% versus 97.2%, according to MMD.

AP-MBIS 10-year muni dips to 2.29%
The Associated Press-MBIS 10-year municipal benchmark 5% general obligation was at 2.28% early on Tuesday, unchanged from the final read of 2.28% on Monday, according to Municipal Bond Information Services, a national consortium of municipal interdealer brokers.

The AP-MBIS index is a yield curve built on market data aggregated from MBIS member firms and is updated hourly on the Bond Buyer Data Workstation.

Primary market
California is coming to market with $1.59 billion of various purpose general obligation bonds in three separate competitive sales on Tuesday.

The offerings consist of $557.22 million of tax-exempt Bid Group B $64 million GOs and $493.22 million refunding GOs; $522.53 million of tax-exempt Bid Group C $134.66 million GOs and $387.88 million refunding GOs; and $508.57 million of Bid Group A taxable GOs.

The deals are rated Aa3 by Moody’s Investors Service, and AA-minus by S&P Global Ratings and Fitch Ratings.

Meanwhile, Illinois is competitively selling $1.5 billion of GOs in three separate sales.

The offerings consist of $500 million Series of November 2017A GOs, $500 million of Series of November 2017B GOs and $500 million of Series of November 2017C GOs.

The deals are rated Baa3 by Moody’s, BBB-minus by S&P and BBB by Fitch.

With this week's sales, since 2013, the Golden State has issued $37.6 billion while the Prairie State has issued $10.64 billion of securities. California saw a low year of issuance in 2014 when it sold $6.24 billion and saw a high in 2016 with $8.92 billion, while Illinois did not come to market in 2015 and saw its high the next year, when it sold $3.36 billion.

Also Tuesday, Nevada is competitively selling $114.96 million of limited tax GOs in six separate sales.

The offerings consist of $84.36 million Series 2017A capital improvement GOs, $8.24 million of Series 2017C open space, parks, natural resources and refunding GOS, $6.29 million of Series 2017E safe drinking water revolving fund matching GOs, $6.21 million of Series 2017B natural resources and refunding GOs, $6 million of Series 2017D Nevada Municipal Bond Bank Project No. 9 GOs, and $3.87 million of Series 2017F water pollution control revolving fund matching GOs.

The deals are rated Aa2 by Moody’s, AAA by S&P and AA-plus by Fitch.

Also Tuesday, the Virginia Public School Authority is competitively selling $116.01 million of 1997 Resolution Series 2017C school financing bonds.

The deal is rated Aa1 by Moody’s and AA-plus by S&P and Fitch.

In the negotiated sector on Tuesday, Goldman Sachs is set to hold a second day of retail orders on the New York City Transitional Finance Authority’s $850 million of Fiscal 2018 Series B Subseries B-1 future tax secured subordinate bonds.

The issue was priced on Monday to yield from 1.01% with 3% and 5% coupons in a split 2019 maturity to approximately 3.40% in 2045. No retail orders were taken in the 2031-2033, 2036, 2038-2041, or 2043 maturities.

The deal has a two-day retail order period before being priced for institutions on Wednesday when the TFA will also competitively sell $140 million of taxable Fiscal 2018 Series B Subseries B-2 future tax secured subordinate bonds.

The deals are rated Aa1 by Moody’s and AAA by S&P and Fitch.

And Citigroup is slated to price the Berks County Industrial Development Authority, Pa.’s $575 million of health system revenue bonds for Tower Health.

The deal is rated A3 by Moody’s and A by S&P and Fitch.

JPMorgan Securities is expected to price the San Diego Association of Governments $204.51 million of Series 2017A toll revenue first senior lien bonds for the South Bay Expressway.

The deal is rated A by S&P and A-minus by Fitch.

Also this week, Massachusetts is selling $818.125 million of bonds in three competitive offerings on Wednesday while the New York Metropolitan Transportation Authority is selling $1 billion of notes in two competitive deals on Thursday.

Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar increased $100.5 million to $16.82 billion on Tuesday. The total is comprised of $7 billion of competitive sales and $9.82 billion of negotiated deals.

Data appearing in this article from Municipal Bond Information Services, including the AP-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 212-803-8372 for more information.

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Primary bond market Secondary bond market State of Illinois State of Nevada State of Ohio State of West Virginia Commonwealth of Massachusetts Virginia Public School Authority Industrial Development Authority, Berks County, PA State of California New York City Transitional Finance Authority Metropolitan Transportation Authority San Diego Association of Governments
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