Municipal market participants are returning to work on Monday looking at another chunky new issue calendar, topped up by the return of Illinois with a multi-billion dollar bond offering that aims to pay off some of the state’s overdue bills.

Secondary market
U.S. Treasuries were narrowly mixed on Monday. The yield on the two-year Treasury fell to 1.56% from 1.58%, the 10-year Treasury yield was flat from 2.38% and yield on the 30-year Treasury bond was steady from 2.89%.

Municipal bonds finished weaker on Friday. The yield on the 10-year benchmark muni general obligation rose three basis points to 1.95% from 1.92% on Thursday, while the 30-year GO yield gained five basis points to 2.74% from 2.69%, according to the final read of Municipal Market Data's triple-A scale.

On Friday, the 10-year muni-to-Treasury ratio was calculated at 81.9% compared with 82.7% on Thursday, while the 30-year muni-to-Treasury ratio stood at 94.7% versus 95.1%, according to MMD.

AP-MBIS 10-year muni at 2.277%, 30-year at 2.842%
The Associated Press-MBIS 10-year municipal benchmark 5% general obligation was at 2.277% in late activity on Friday, compared to the final read of 2.254% on Thursday, according to Municipal Bond Information Services, a national consortium of municipal interdealer brokers. The AP-MBIS 30-year muni was at 2.842% versus 2.813% on Thursday.

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

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 30,481 trades on Friday on volume of $7.65 billion.

Prior week's actively traded issues
Revenue bonds comprised 56.64% of new issuance in the week ended Oct. 20, down from 56.97% in the previous week, according to Markit. General obligation bonds made up 37.56% of total issuance, up from 37.02%, while taxable bonds accounted for 5.80%, down from 6.01%.

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Some of the most actively traded bonds by type were from California and New York issuers.

In the GO bond sector, the San Diego Unified School District 4s of 2047 were traded 97 times. In the revenue bond sector, the NYC TFA 4s of 2042 were traded 91 times. And in the taxable bond sector, the California 2.5s of 2022 were traded 19 times.

Previous week's top underwriters
The top municipal bond underwriters of last week included Bank of America Merrill Lynch, JPMorgan Securities, Citigroup, Goldman Sachs and Morgan Stanley, according to Thomson Reuters data.

In the week of Oct. 15 to Oct. 21, BAML underwrote $1.81 billion, JPMorgan $1.72 billion, Citi $1.7 billion, Goldman $1.11 billion, and Morgan Stanley $880.1 million.

Primary market
This week’s new issue calendar totals $10 billion and is composed of $8.3 billion of negotiated deals and $1.7 billion of competitive sales.

Illinois is set to offer $4.5 billion of general obligation bonds on Wednesday. Barclays Capital is expected to price the state’s Series of November 2017D GOs on Wednesday.

The bonds are rated Baa3 by Moody’s Investors Service, BBB-minus by S&P Global Ratings and BBB by Fitch Ratings.

Moody’s and Fitch have negative outlooks on the state’s credit while S&P maintains a stable outlook.

A premarketing scale that was circulating late last week showed yields ranging from 115 basis points above the interpolated MMD scale for the 2020 maturity to 170 basis points above the scale for the 2028 maturity, with the highest yields in the 2024-2027 maturities which came in at 175 basis points above the scale.

Action kicks off on Tuesday, as Goldman Sachs is set to price Gainesville, Fla.’s $415.87 million of Series 2017A utility system revenue bonds.

The deal is rated Aa3 by Moody’s and AA-minus by S&P and Fitch.

JPMorgan Securities is expected to price the Missouri Health and Educational Facilities Authority’s $291.7 million of Series 2017C health facilities revenue bonds for Mercy Health on Tuesday.

The deal is rated Aa3 by Moody’s and AA-minus by S&P.

Jefferies is expected to price Wisconsin’s $272.6 million of GO refunding bonds of 2017, Series 2 on Tuesday.

The deal is rated Aa1 by Moody’s, AA by S&P, and AA-plus by Fitch and Kroll Bond Ratings Agency.

Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar increased $885.4 million to $14.15 billion on Monday. The total is comprised of $4.73 billion of competitive sales and $9.43 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 212-803-8474 for more information.

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Chip Barnett

Chip Barnett

Chip Barnett is a journalist with more than 40 years of experience. Barnett is currently Senior Market Reporter for The Bond Buyer.