After a quiet day in the primary, market participants are ready and waiting for not only one of the busiest days in a while but also one of the busiest weeks.
Secondary Market
Top-rated municipal bonds were weaker at Monday's close, according to traders. The yield on the 10-year benchmark muni general obligation was two basis points higher to 1.42% from 1.40% on Friday, while the yield on the 30-year muni increased one basis point to 2.13% from 2.12%, according to the final read of Municipal Market Data's triple-A scale.
Treasuries were mostly weaker, as the yield on the two-year Treasury increased to 0.67% from 0.66% on Friday, the 10-year Treasury yield rose to 1.49% from 1.46% and the yield on the 30-year Treasury bond increased to 2.23% from 2.19%.
The 10-year muni to Treasury ratio was calculated at 94.9% on Monday compared to 91.2% on Friday, while the 30-year muni to Treasury ratio stood at 95.2% versus 94.9%, according to MMD.
Primary Market
Total volume for the week of Aug. 5 is estimated by Ipreo at $11.9 billion, up from the revised total of $5.7 billion that was sold in the prior week, according to Thomson Reuters data. The calendar consists $8.6 billion of negotiated deals and $3.3 billion of competitive sales.
While no large institutional sales hit the screens Monday, it was the last day of a two-day retail order period for $800 million New York City general obligation bonds. The GOs, fiscal 2017 series A, subseries A-1 were priced for retail to yield from 0.68% with 3% and 5% coupons in a split 2019 maturity to 2.739% with a 2.625% coupon in 2040. No retail orders were taken in the 2030 through 2033 and 2037 through 2038 maturities. The 2017 maturity was offered as a sealed bid.
Goldman, Sachs & Co. is running the books, with institutional pricing expected on Tuesday. The deal is rated Aa2 by Moody's Investors Service and AA by S&P Global Ratings and Fitch Ratings.
The Big Apple will also issue two competitive sales of taxable GO bonds on Tuesday totaling $250 million.
The calendar is unusually fat on Tuesday, as the market expects more than 10 deals of at least $100 million to price, including three of the five largest deals of the week.
The state of Minnesota will sell five separate competitive sales totaling almost $788 million on Tuesday. The Land of 10,000 Lakes is expected to sell $301.195 million of GO state various purpose refunding bonds, $264.25 million of GO state various purpose bonds, $215 million of GO state trunk highway bonds, and $7.5 million of GO taxable state various purpose bonds. All of the deals are rated Aa1 by Moody's and AA-plus by S&P.
Goldman, Sachs is expected to price the Board of Regents of the University of Texas' $350 million of system revenue financing bonds on Tuesday. The deal is rated triple-A by Moody's, S&P and Fitch.
Siebert Brandford Shank and Co. is slated to price the Pennsylvania Turnpike Commission's $314.275 million of oil franchise tax senior revenue refunding bonds on Tuesday. The deal is expected to consist of $199.185 million of series A of 2016 bonds that are rated Aa3 by Moody's and AA by Fitch, as well as $115.09 million of series B of 2015 bonds that are rated A2 by Moody's and A-plus by Fitch.
Ramirez is scheduled to price the city of San Antonio, Texas's $364 million on Tuesday.
Back to the competitive arena on Tuesday, the Plano Independent School District in Texas is on the docket to sell $257.195 million of unlimited tax school building bonds on Tuesday. The deal is backed by the permanent school fund guarantee program and is rated triple-A by Moody's and S&P.
The Miami-Dade County School District, Fla., is scheduled to competitively sell $200 million of general obligation school bonds. The deal is rated Aa3 by Moody's and A-plus by S&P.
Previous Week's Top Underwriters
The top negotiated and competitive underwriters of last week included Morgan Stanley, JPMorgan Securities, Bank of America Merrill Lynch, Citigroup and Barclays according to Thomson Reuters data. In the week of July 24-30, Morgan Stanley underwrote $1.37 billion, JPMorgan $1.04 billion, BAML $833 million, Citi $798 million and Barclays $606 million.
Prior Week's Actively Traded Issues
Revenue bonds comprised 51.08% of new issuance in the week ended July 29, up from 49.51% in the previous week, according to Markit. General obligation bonds comprised 38.73% of total issuance, down from 39.24%, while taxable bonds made up 10.19%, down from 11.25%.
Some of the most actively traded issues by type were from Nebraska and California issuers. In the GO bond sector, the Sarpy County School District, Neb., 3s of 2039 were traded 27 times. In the revenue bond sector, the California 4s of 2041 were traded 81 times. And in the taxable bond sector, the California 7.55s of 2039 were traded 25 times.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $656.2 million to $17.53 billion on Tuesday. The total is comprised of $5.79 billion of competitive sales and $11.74 billion of negotiated deals.
