Wednesday will be a busy day for munis as more than $1 billion of bonds are scheduled to come to market.
Yields were climbing Tuesday and traders said it is affecting retail investors. "Institutions are going to keep buying and grabbing everything until retail comes back," said a New York trader. "Retail should come back once we find some steady ground on the curve, but the problem is we can't sit anywhere for that long. People keep saying we are going to wait, but that is not what we need right now. "
Primary Market
On Wednesday, Fairfax County, Va., will sell $229.905 million of public improvement bonds in the competitive arena. The issue, which will be structured as serials ranging from 2015 to 2034, is rated triple-A by Moody's Investors Service, Standard & Poor's and Fitch Ratings. Public Financial Management is the financial advisor on the sale.
Fairfax County last sold bonds on Oct. 21, 2014. Citigroup Global Markets won the $208.545 million public improvement bonds with a TIC of 1.9075%.
On the negotiated slate is the New York City Municipal Water Finance Authority's $475 million sale of second resolution, fixed-rate tax-exempt refunding bonds. The deal is scheduled to be priced by Citigroup Global Markets for retail investors on Wednesday and for institutions on Thursday. The issue is rated Aa2 by Moody's, and AA-plus by both S&P and Fitch.
Also on tap is the $200 million Board of Regents of the University of Texas System's Permanent University Fund refunding bonds. The deal is scheduled to be priced by Barclays Capital. The issue is rated triple-A by Moody's, S&P and Fitch.
And J.P. Morgan Securities is slated to price $116.645 million of revenue bonds for Scottsdale, Ariz. This issue, which will be structured as serials ranging from 2016 to 2035 is rated triple-A by S&P.
Secondary Market
Treasury prices were slightly stronger on Wednesday. The two-year Treasury note's yield was unchanged at 0.67% from Tuesday, while the 10-year yield dropped to 2.13% from 2.14% on Tuesday and the 30-year yield decreased to 2.72% from 2.74%.
The yield on the 10-year benchmark muni general obligation was up four basis points to 2.09% on Tuesday to 2.09% from 2.05% on Friday, while the yield on 30-year GO also rose five basis points to 2.92% from 2.87%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 97.7% on Tuesday versus 101.0% on Friday, while the 30-year muni to Treasury ratio stood at 106.6% compared to 109.1%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $306.5 million to $9.839 billion on Wednesday. The total is comprised of $2.247 billion competitive sales and $7.592 billion of negotiated deals.
MSRB Reports Previous Session's Activity
The Municipal Securities Rulemaking Board reported 34,859 trades on Tuesday on volume of $7,459 billion.
Most active on Wednesday, based on the number of trades, was the Pennsylvania Higher Educational Facilities Authority's 2015 Series A revenue bonds for Thomas Jefferson University 4s of 2045, which traded 244 times at an average price of 99.592, with an average yield of 4.019%.
Top Traded Munis by Sector
Munis from issuers in Puerto Rico, Pennsylvania, and Oregon were the top traded bonds in the week of Feb. 9, according to data released by Markit.
Revenue bonds made up 55.34% of last week's issuance, down from 56.49% in the previous week. General obligation bonds comprised 35.26% of total issuance, up from 35.45%, while tax bonds made up 9.40% of total issuance, down from 8.06% in the prior week.
In the GO bond sector, Puerto Rico GO 8s of 2035 traded 68 times. It was followed by Texas 5s of 2044 which traded 25 times, San Francisco 5s of 2026 which traded 16 times, Pennsylvania 3s of 2030 which traded 15 times and Maple Heights City School District, Ohio, 3 3/4s of 2036 which traded 14 times, according to Markit.
In the revenue bond sector, Pennsylvania revenue 4s of 2045 traded 47 times. It was followed by the New York Metropolitan Transportation Authority 5s of 2045 which traded 36 times, the New York City Transitional Finance Authority 5s of 2043 which traded 33 times, California Statewide Community Development Authority 5s of 2042 which traded 29 times and the Los Angeles Department of Airport 5s of 2038 traded 28 times.
In the taxable sector, Washington County School District No. 48J, Beaverton, Ore., 4.06s of 2034 traded 28 times. It was followed by California 7 1/2s of 2034 which traded 20 times, New York State Urban Development Corp. 2.83s of 2022 which traded 18 times, Los Angeles County Metropolitan Transportation Authority 5.735s of 2039 which trade 14 times, and the Port Authority of New York and New Jersey 4.458s of 2062 which traded 13 times, Markit reported.
Last Week's Actively Quoted Issues
New York and Puerto Rico names were among the most quoted issues in the week of Feb. 9, according to data released by Markit.
Among bid-side quotes, the Port Authority of New York and New Jersey revenue bond 4.458s of 2062 were quoted by 14 unique dealers. Among ask-side quotes, the New York Metropolitan Transportation Authority revenue bond 5s of 2045 were quoted by 17 dealers. And among two-sided quotes, the Puerto Rico GO 8s of 2035 were quoted by 19 dealers.
