The municipal bond market looked ahead to next month's new wave of bond supply as November's activity faded away in the last few trading hours of the month.
After the week's paltry new issue slate, December looks to kick off nicely, with a good variety of new deals coming to market.
Looking Ahead
There are about $12.4 billion of new municipal bonds scheduled for sale the week of Dec. 1.
The calendar consists of approximately $10.5 billion of negotiated deals and $1.9 billion of competitive sales, according to The Bond Buyer. This compares to this week's revised $945.3 million negotiated and $169.8 million competitives, according to Thomson Reuters.
Among the top negotiated deals scheduled are the Texas Transportation Commission's $1.6 billion general obligation mobility fund bonds, scheduled to be priced by Bank of America Merrill Lynch on Wednesday.
Also of note on the negotiated slate are the $750 million of New York State Thruway Authority's general revenue refunding bonds to be priced by Goldman, Sachs on Wednesday; the $750 million Miami-Dade County, Fla., of aviation revenue refunding bonds, AMT and non-AMT, to be priced by Wells Fargo Securities on Wednesday; the $610 million of Phoenix, Ariz., Civic Improvement junior lien water system revenue bonds, to be priced by Bank of America Merrill Lynch on Wednesday.
The competitive sale calendar is dominated by three big issues from New York totaling about $1.3 billion and one from New Jersey for $525 million.
On Tuesday, the New York State Urban Development Corp. is offering for bid $372 million of taxable state personal income tax revenue bonds, and $424 million Group A and $515 million of Group B state personal income tax revenue bonds.
On Wednesday, the state of New Jersey sells $525 million of general obligation bonds. Also on Wednesday, the Los Angeles, Calif., MTA will offer $140 million of revenue bonds.
No muni deals were scheduled on Wednesday or on the abbreviated trading session for Friday.
Looking Behind
Long-term municipal bond issuance rose for the fourth month in a row as volume increased 15.3% in November, according to Thomson Reuters data.
New issue supply rose to $28.330 billion in November, a double digit increase from the $24.563 billion in 841 deals that were priced in November of 2013, according to the final numbers. November's supply, however, was lower than October's total of $34 billion in issuance.
Tax-exempt issuance was up 18.9% in November to $25.684 billion in 842 deals, compared to $21.599 billion in 746 deals in the same period last year. Taxable sales rose 65.4% to $2.138 billion in 69 deals from 1.293 billion in 77 sales in November 2013.
Secondary Market
The bond markets had a regular trading day on Wednesday and an early close on Friday, but little if any in the way of secondary activity was expected on either day.
"It's totally dead," one New York trader said on Wednesday.
Municipal bond yields were unchanged to lower on Wednesday, with the benchmark 10-year general obligation yield down as much as two basis points from the Tuesday final read of 2.13% and 30-year GO was one to three basis points lower from 3.07% on Tuesday, according to a read of MMD's triple-A scale.
Treasury prices were mostly higher, with the two-year note yield off one basis point to 0.51% from Tuesday's market close. The 10-year yield was down three basis points to 2.24% while the 30-year fell four basis points to 2.94%.
On Tuesday, the 10-year muni-to-Treasury ratio closed at 94.2%, up from 93.2% on Monday. The 30-year muni to Treasury ratio closed at 103.5%, compared with 102.1% on Monday.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 35,782 trades on Tuesday for volume of $8.635 billion.
Most active on Tuesday, based on the number of trades, were the New Jersey State Trust Fund Authority's Transportation Program's 2014 Series AA 4 ¼ of 2044 which traded 218 times with an average price of 98.768 for an average yield of 4.323%.
Bond Buyer Indexes
The weekly average yield to maturity of the Bond Buyer Municipal Bond Index, which is based on 40 long-term bond prices, was unchanged at 4.40% in the week ending Nov. 25.
The 20-Bond GO Index of 20-year general obligation yields rose one basis point, to 3.94%, from 3.93% the previous week. The 11-Bond GO Index of higher-grade 20-year GO yields also rose one basis point, to 3.79% from 3.78% the previous week, and t 25-bond Revenue Bond Index fell four basis points to 4.58% from 4.62% the previous week.
