Municipal issuance is estimated at well over $6 billion for the coming holiday shortened week, highlighted by deals from Long Island Power Authority and Hawaii.
Weekly volume is estimated at $6.6 billion by the Bond Buyer and Ipreo, including $4.2 billion of negotiated deals and $2.4 billion of competitive sales. That compares with $8.1 billion that came to market in the past week, including two deals of close to $2 billion each, as issuers continued to take advantage of historically how interest rates.
“We made it through this week's supply pretty well,” said a New York trader. “Next week's supply is lighter, an October hike is off the table, but I don't see the market doing much next week, especially because of the holiday.”
The largest deal comes from LIPA, which is slated to sell $1 billion in restructuring bonds through its Utility Debt Securitization Authority on Thursday. Bank of America Merrill Lynch will be the lead manager on the deal, which is scheduled to have a retail order period on Wednesday. The transaction is rated Aaa by Moody’s Investors Service and triple-A by both Standard and Poor’s and Fitch Ratings.
The deal is designed to lower the costs of the utility’s nearly $8 billion in outstanding debt.
The securitization authority, which also sold $2.1 billion in refunding bonds for LIPA in December 2013, is authorized by New York State legislation to issue up to $4.5 billion.
Hawaii will say aloha, when BAML prices the state’s $747 million of general obligation bonds of 2015, Series’ ET, EU, EV, EW, EX, EY, EZ and FA. The EU series are green bonds and a retail order period will take place on Wednesday, with institutional pricing on Thursday. The deal is rated Aaa by Moody’s and AA by Fitch.
In the competitive sector, the Dormitory Authority of the State Of New York will be selling roughly $951.245 million in three separate sales on Tuesday. The state sales tax revenue bonds, Series 2015B will have three groups of sales. Group A is for $296.215 million, group B is for $502.91 million and group C is for $152.12 million.
Secondary Trading
The yield on the 10-year benchmark muni general obligation closed Friday at 2.05%, up from 2.04% on Thursday, while the 30-year GO was two basis points higher to 3.10% from 3.09%, according to a final read of the Municipal Market Data's triple-A scale.
Since Oct. 2, yields have been on the rise: 10-year GOs have risen seven basis points while the 30-year has increased by eight.
At the close on Friday, Oct. 2 yields on the 10-year GO were 1.98%, while yields on the 30-year were 3.02%
The 10-year muni to Treasury ratio was calculated on Friday at 97.8% versus 97.0% on Thursday, while the 30-year muni to Treasury ratio stood at 105.9% compared to 105.1%, according to MMD.
Treasury prices were mixed Friday’s close, with the yield on the two-year Treasury increasing to 0.64% from 0.63% from Thursday, while the 10-year yield went unchanged at 2.10% and the 30-year yield decreased to 2.93% from 2.95%.
The Week's Most Actively Quoted Issues
California and Puerto Rico were some of the most actively quoted names in the week ended Oct. 9, according to data released by Markit.
On the bid side, the California state tax 7.5s of 2034 were quoted by 11 unique dealers. On the ask side, the California state public works revenue 5s of 2023 were quoted by 19 dealers. And among two-sided quotes, Puerto Rico commonwealth GO 8s of 2035 were quoted by 13 dealers, Markit said.
The Week's Most Actively Traded Issues
Some of the most actively traded issues in the week ended Oct. 9 were in California and Colorado according to Markit.
In the revenue bond sector, the Colorado Health Facility Authority 4s of 2045 were traded 97 times. In the GO bond sector, California State 5s of 2045 were traded 32 times. And in the taxable bond sector, the Grant County, Wash., Public Utility District No. 2 for Priest Rapids Hydro Electric 4.584s of 2040 were traded 17 times, Markit said.
