The muni market is eagerly awaiting the first of the weeks' new issuance although really looking ahead to the Kansas Development Finance Authority's $1 billion pension deal, which is expected Wednesday.
Secondary Market
Treasury prices were higher on Tuesday, with the yield on the two-year Treasury note falling to 0.68% from 0.73% on Monday, while the 10-year yield fell to 2.17% from 2.23% and the 30-year yield decreased to 2.84% from 2.90%.
The yield on the 10-year benchmark muni general obligation on Monday rose two basis points to 2.23% from 2.21% on Friday, while the yield on the 30-year GO was up three basis points to 3.11% from 3.08%, 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 99.7% versus 101.8% on Friday, while the 30-year muni to Treasury ratio stood at 107.2% compared to 109.0%, according to MMD.
Primary Market
The first new issue supply of this weeks' estimated $5 billion volume is set to come on Tuesday, as Wells Fargo is scheduled to price MEAG's $183.76 million of Georgia Power Project J revenue bonds on Tuesday. The bonds are rated A2 by Moody's and A-plus by S&P and Fitch.
The biggest deal of the week is a $1 billion offering from the Kansas Development Finance Authority. The deal, to be by priced by Bank of America Merrill Lynch on Wednesday, consists of Series 2015H taxable revenue bonds. The issue is rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's.
The KDFA is ready to go to market with the $1 billion of pension obligation bond sale that drew a heated debate in the longest legislative session in the state's history.
Since 1995, the KDFA has issued roughly $9.52 billion of debt with the highest years of issuance occurring in 2004 and 2010 when the authority issued $929 million and $878 million, respectively. The KDFA saw low years of issuance in 1995 and 1999, when they issued just $58 million and $126 million, respectively.
Goldman is scheduled to price the Los Angeles County Public Works Authority, Calif.'s $218.155 million of lease revenue refunding bonds on Wednesday. The issue, which consists of Series B tax-exempts and Series C taxables, is rated A1 by Moody's, AA by S&P and A-plus by Fitch.
Morgan Stanley will price the state of Michigan's $129.31 million of Series 2015A tax-exempt general obligation environmental program refunding bonds on Wednesday. The issue is rated Aa1 by Moody's and AA-minus by S&P and Fitch.
Wells Fargo Securities is also scheduled to price Charlotte, N.C.'s $475 million of water and sewer revenue bonds on Thursday. The issue is rated triple-A by Moody's, S&P and Fitch Ratings.
Goldman, Sachs will price the $381.71 million of hospital refunding revenue bonds, Series 2015 for the Children's Hospital Obligated Group Issue in Washington, D.C., on Thursday.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 33,041 trades on Monday on volume of $3.895 billion.
The most active bond, based on the number of trades, was the Washington HealthCare Facilities Authority Series 2015A revenue bonds for Providence Health and Services 4s of 2045, which traded 163 times at an average price of 99.806, an average yield of 4.01%. The bonds were initially priced at 97.766 to yield 4.13%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar was up $234 million to $8.78 billion on Tuesday. The total is comprised of $2.69 billion competitive sales and $6.09 billion of negotiated deals.
