The municipal bond market on Tuesday priced the first of the week’s big new issues, before buyers turn their focus to the high-rated, but high-yielding sales tax securitization coming from Chicago on Wednesday.

Secondary market
The MBIS municipal non-callable 5% GO benchmark scale was stronger in late trading.

The 10-year muni benchmark yield fell to 2.365% on Tuesday from the final read of 2.368% on Friday, according to Municipal Bond Information Services. The MBIS 30-year benchmark muni yield dropped to 2.828% from 2.851%.

The MBIS benchmark index is updated hourly on the Bond Buyer Data Workstation.

Top-rated municipal bonds finished stronger on Tuesday. The yield on the 10-year benchmark muni general obligation fell two basis points to 2.10% from 2.12% on Friday, while the 30-year GO yield dropped two basis points to 2.69% from 2.71%, according to the final read of MMD’s triple-A scale.

U.S. Treasuries were mixed in late activity. The yield on the two-year Treasury gained to 2.01% on Tuesday from 2.00% on Friday, the 10-year Treasury yield was steady at 2.55% and the yield on the 30-year Treasury decreased to 2.84% from 2.85%.

On Tuesday, the 10-year muni-to-Treasury ratio was calculated at 82.6% compared with 83.2% on Friday, while the 30-year muni-to-Treasury ratio stood at 94.9% versus 95.0%, according to MMD.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 35,999 trades on Friday on volume of $9.31 billion.

Prior week's actively traded issues
Revenue bonds comprised 55.91% of new issuance in the week ended Jan. 12, down from 56.45% in the previous week, according to Markit. General obligation bonds made up 38.41% of total issuance, up from 37.83%, while taxable bonds accounted for 5.68%, down from 5.72% a week earlier.

Some of the most actively traded bonds by type in the week were from California, New Jersey and Pennsylvania issuers.

In the GO bond sector, the Santa Clara Unified School District., Calif., 3s of 2036 traded 24 times. In the revenue bond sector, the New Jersey Economic Development Authority 4s of 2047 traded 47 times. And in the taxable bond sector, the Pennsylvania Commonwealth Financing Authority 3.864s of 2038 traded 71 times.

Primary market
On Tuesday, the Sheldon Independent School District, Texas, competitively sold $98.665 million of Series 2018 unlimited tax school building and refunding bonds.

UBS won the bonds with a true interest cost of 3.38%. The bonds were priced to yield from 1.45% with a 5% coupon in 2019 to 3.31% with a 3.125% coupon in 2041 and from 3.15% with a 4% coupon in 2044 to 3.363% with a 3.25% coupon in 2045. A term bond in 2048 was priced to yield 3.20% with a 4% coupon.

The deal is backed by the Permanent School Fund guarantee program and is rated Aaa by Moody’s Investors Service.

On Wednesday, Goldman Sachs is set to price the Sales Tax Securitization Corp.’s $898.07 million of Series 2018A sales tax securitization bonds.

The Chicago deal is rated AA by S&P Global Ratings, and AAA by Fitch Ratings and Kroll Bond Rating Agency.

JPMorgan Securities is expected to price the Orlando Utilities Commission, Fla.’s $150.18 million of Series 2018A utility system revenue bonds.

The deal is rated Aa2 by Moody’s and AA by S&P and Fitch.

Loop Capital Markets is expected to price the Pasadena Independent School District, Texas’ Series 2018 unlimited tax school building bonds.

The deal is backed by PSF and rated triple-A by Moody’s and S&P.

In the competitive arena on Wednesday, the University of Kentucky is selling $210 million of Series 2018A general receipt bonds.

The deal is rated Aa2 by Moody’s and AA by S&P.

In the short-term competitive arena, the New York Metropolitan Transportation Authority is planning to sell $500 million of Series 2018A transportation revenue bond anticipation notes.

The BANs are rated MIG1 by Moody’s, SP1-plus by S&P and F1-plus by Fitch.

Previous week's top underwriters

The top municipal bond underwriters of last week included Bank of America Merrill Lynch, RBC Capital Markets, Citigroup, JPMorgan Securities and Stifel, according to Thomson Reuters data.

In the week of Jan. 7 to Jan. 13, BAML underwrote $809.9 million, RBC $482.3 million, Citi $383.0 million, JPMorgan $366.1 million, and Stifel $249.4 million.

Data appearing in this article from Municipal Bond Information Services, including the 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.
Aaron Weitzman

Aaron Weitzman

Aaron Weitzman is a markets reporter for The Bond Buyer, focusing on the sell side of the municipal bond market.