The municipal bond market will see more deals come to market after more than $2 billion of competitive new issues were priced on Tuesday.
Primary Market
An approximately $1 billion composite deal from the Trinity Health Credit Group leads the negotiated calendar Wednesday and consists of new money and refunding.
The bonds are scheduled to be priced by Bank of America Merrill Lynch in three series - one each from Michigan, Idaho and Maryland. About $75 million in interest-rate savings is expected from the refunding section. The issue is rated Aa3 by Moody's Investors Service, AA-minus by Standard & Poor's and AA by Fitch Ratings.
Mississippi will bring a four-part sale of GOs totaling $702 million. The $157 million Series A GOs is set to be priced by Raymond James; the $129 million Series B taxable GOs is expected to be priced by Bank of America Merrill; the $247 million Series C GO refunding bonds totaling is slated to be priced by JPMorgan Securities; and the $169 million Series D taxable GO refunding bonds will be priced by RBC Capital Markets. All series are rated Aa2 by Moody's, AA by Standard & Poor's, and AA-plus by Fitch.
Also on tap is the $499 million Los Angeles Department of the Airports, Calif., offering. Morgan Stanley is expected to price the issue in three series: senior revenue bonds, Series A (AMT); senior revenue bonds Series B (non-AMT); and subordinate refunding revenue bonds, Series C. The senior bonds are rated Aa3 by Moody's and AA by S&P and Fitch, while the subordinate bonds are rated A1 by Moody's and AA-minus by Standard & Poor's and Fitch.
Additionally, the Iowa Finance Authority will offer $323.46 million of state revolving fund revenue bonds, designated as green bonds. The issue, which will be priced by J.P. Morgan Securities, is rated triple-A by Moody's, S&P and Fitch.
Secondary Market
Treasury prices moved lower on Wednesday. The two-year note yield rose to 0.52% from 0.50% on Tuesday; the 10-year yield increased to 1.84% from 1.77%, while the 30-year yield jumped to 2.43% from 2.36%.
Prices of top-quality municipal bonds finished lower on Tuesday. The yield on the muni 10-year benchmark general obligation rose six basis points to 1.80% from 1.74% on Monday, while the yield on 30-year GOs was up nine basis points to 2.59% from 2.50%, according to the final read of Municipal Market Data's triple-A scale.
On Tuesday, the 10-year muni to Treasury ratio decreased to 101.1% from 104.2% on Monday, while the 30-year muni to Treasury ratio declined to 109.3% from 111.1%.
MSRB Reports Previous Session's Activity
The Municipal Securities Rulemaking Board reported 36,590 trades on Tuesday on volume of $7.186 billion.
Most active on Tuesday, based on the number of trades, was the Tulare Local HealthCare District, Calif., taxable Series 2005B Build America Bonds of Sept. 10, 2009, 7.95s of 2035, which traded 108 times with an average price of 109.396 and an average yield of 5.559%.
