The municipal bond market is set on Tuesday for five competitive deals coming from the state of Georgia worth around $1.3 billion. Traders will be watching muni yields, which have recently been trending higher.
Secondary Market
Treasury prices were lower on Tuesday with the yield on the two-year Treasury note rising to 0.69% from 0.68% on Monday, while the 10-year yield increased to 2.40% from 2.38% and the 30-year yield rose to 3.14% from 3.10%.
The yield on the 10-year benchmark muni general obligation on Monday ended down one basis point to 2.35% from 2.36% on Friday, while the yield on the 30-year GO was off one basis point to 3.31% from 3.32%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Monday at 98.8% versus 101.8% on Friday, while the 30-year muni to Treasury ratio stood at 106.7% compared to 106.8%, according to MMD.
Primary Market
Leading the calendar on Tuesday is the Peach State's offerings, which consist of $275.32 million of Series 2015A general obligation bonds, Tranche 1; $288.03 million of Series 2015A GOs, Tranche 2; $265.1 million of Series 2015B taxable GOs, Tranche 1; and $279.15 million of Series 2015C GO refunding bonds; and $182.73 million of Series 2015B taxable GOs, Tranche 2.
Moody's Investors Service, Standard & Poor's and Fitch Ratings all affirmed their triple-A ratings on Georgia ahead of the deal. Public Resources Advisory Group is the state's financial advisor. Holland & Knight is bond counsel and Kutak Rock is disclosure counsel.
The last time the Peach State sold comparable bonds in the competitive market was on June 17, 2014, when Wells Fargo Securities won $329.25 million of Series 2014A GOs, Tranche 1, with a TIC of 1.63%.
Since 1995, Georgia has issued about $21 billion of bonds, with the most issuance occurring in 2006 and 2009 when the state sold $1.7 billion and $2.5 billion, respectively. The state issued the least amount of bonds in 1996 and 2008 when it sold $496 million and 532 million, respectively.
Also on Tuesday, JPMorgan is expected to price Maricopa County, Ariz.'s $184.99 million Series 2015 certificates of participation. The deal is rated Aa1 by Moody's and AA-plus by S&P and Fitch.
On Wednesday, the city of Atlanta is scheduled to competitively offer $252 million of Series 2015 GO public improvement bonds. The bonds are rated Aa2 by Moody's, AA by S&P and AA-plus by Fitch.
First Southwest and Grant & Associates are co-financial advisors for Atlanta's offering. Hunton & Williams and the Haley Law Firm are co-bond counsel and Greenberg Traurig and Riddle & Schwartz are co-disclosure counsel.
Atlanta last sold comparable bonds competitively on March 5, 2007, when Wachovia Bank bought $8 million of Series 2007A various purpose GOS with a TIC of 3.98%.
In the negotiated sector on Wednesday, RBC Capital Markets is slated to price Miami-Dade County, Fla.'s $534.18 million deal consisting of Series 2015A aviation revenue and refunding bonds, subject to the alternative minimum tax, and Series 2015B non-AMT aviation revenue refunding bonds. The deal is rated A by S&P and Fitch and AA-minus by Kroll Bond Rating Agency.
RBC is also expected to price the Cleveland Municipal School District, Ohio's $200 million of unlimited tax Series 2015 tax-exempt and Series 2015B taxable general obligation bonds on Wednesday. The deal is backed by the Qualified School Construction Bond Program, Direct Payment, and rated Aa2 by Moody's and AA by S&P and Fitch.
And Citi is slated to price the Erie County Industrial Development Agency, N.Y.'s $240.18 million of Series 2015A school facility refunding revenue bonds for the Buffalo City School District on Wednesday.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 38,201 trades on Monday on volume of $8.313 billion.
The most active bond, based on the number of trades, was the New York State Dormitory Authority Series 2015A revenue bonds (non-state supported debt) for the North Shore Long Island Jewish obligated Group 4 1/8s of 2035, which traded 214 times at an average price of 100.104 with an average yield of 4.089%. The bonds were initially priced at 97.535 to yield 4.28%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $264.3 million to $12.54 billion on Tuesday. The total is comprised of $5.76 billion competitive sales and $6.78 billion of negotiated deals.
