Municipal bond traders saw the last of the week's issuance come to market on Tuesday as two big deals from Illinois were scheduled to be priced and a smaller issue from New Jersey was sold in a competitive offering.
Municipal bond prices were flat to slightly stronger on the day as secondary market activity winds down.
Primary Market Closing out the month was the biggest deal of the week: the $270 million Illinois State Toll Highway Authority toll highway senior revenue refunding bonds.
Siebert Brandford Shank & Co. was slated to price the bonds. The issue is secured by toll revenues and the authority's pledges in bond covenants to charge a rate sufficient to repay debt, fund reserves and maintain a targeted debt-service coverage ratio.
Moody's Investors Service has affirmed the tollway's senior-lien Aa3 rating and stable outlook. Fitch Ratings and Standard & Poor's affirmed the authority's AA-minus rating and stable outlook.
In October, the agency came to market with a $400 million new money sale. That issue priced with 5% coupons ranging in yield from 2.82% in 2027 to 3.53% in 2039. The generic, triple-A general obligation bond in 2039 yielded 2.89% at the time of the pricing, according to Municipal Market Data.
Also on Tuesday, BMO Capital Markets Inc. priced $100 million McHenry County, Ill., Conservation District general obligation refunding bonds.
The bonds were priced as serials to yield from 1.24% with a 3% coupon in 2015 to 2.93% with a 5% coupon in 2027. The issue is rated Aa1 by Moody's and AA-plus by S&P.
In the competitive arena, Hudson County, N.J., sold $74 million general obligation bonds, due 2015-2031.The bonds are rated AA by S&P. No information was immediately available.
Secondary Market Municipal bond yields were unchanged to a tad lower at mid-session, with the benchmark 10-year GO off as much as one basis point from Monday's final read of 2.15% and 30-year GO steady at 3.08%, according to the midday read of Municipal Market Data's triple-A scale.
Treasury prices were mixed, with the two-year note yield up three basis points to 0.53% from Monday's market close. The 10-year yield was down one basis point at 2.30% while the 30-year was off two basis points to 3.02%.
On Monday, the muni to Treasury ratio was higher. The 10-year muni to Treasury ratio closed at 93.2% from 92.9% on Friday. The 30-year muni to Treasury ratio closed at 102.1% from 101.9% on Friday.
The bond markets are closed on Thursday for Thanksgiving and have a 2 p.m., EST, recommended close on Friday. No muni deals are scheduled for Wednesday or during the abbreviated trading session on Friday and little in the way of secondary activity is expected then either. MSRB: Previous Session's Activity The Municipal Securities Rulemaking Board reported 36,933 trades on Monday for volume of $6.434 billion. Most active based on the number of trades were the Missouri State Health and Educational Facilities Authority 4s of 2045 which traded 357 times at an average price of 98.718 and an average yield of 4.073%.
Yvette Shields contributed to this report.
