The municipal bond market on Tuesday will see a big California issuer sell the largest competitive deal of the week while a New York issuer will hold a second day of retail orders for its bonds.
Primary Market
On Tuesday, the largest competitive sale of the week is going up for bid: Orange County Sanitation District, Calif.'s $131 million of wastewater refunding obligations. The issue is rated AAA by Standard & Poor's and Fitch Ratings.
On Monday, Ramirez & Co. priced the New York City Transitional Finance Authority's $750 million of building aid revenue bonds for retail investors. The issue has a second day of orders for mom and pop investors on Tuesday before being priced for institutions on Wednesday. The bonds are rated Aa2 Moody's Investors Service and AA by S&P and Fitch.
Also on Monday, J.P. Morgan Securities priced King County, Wash.'s $742.545 million of sewer revenue refunding and limited tax general obligation refunding bonds for institutions after a one-day retail order period on Friday. The sewers are rated Aa2 by Moody's and AA-plus by S&P while the GOs are rated Aa1 by Moody's and AAA by S&P.
Some of the other large offerings on tap this week are:
- A $400 million taxable "Corporate Cusip" bond deal to be priced by Wells Fargo Securities on Wednesday for the University of Notre Dame Du Lac in Indiana;
- A $502 million Illinois Finance Authority revenue bond deal for Chicago's Rush University Medical Center Obligation Group to be priced by Goldman, Sachs on Thursday;
- A $400 million sale from the N.Y. Metropolitan Transportation Authority to be priced by JPMorgan on Thursday; and
- The Oregon Department of Transportation $378.96 million of highway user tax revenue bonds and senior lien refunding bonds to be priced by Morgan Stanley.
Secondary Market
Treasury prices were higher on Tuesday, with the two-year note yield down to 0.53% from 0.55% on Monday. The 10-year yield dropped to 1.88% from 1.91%, while the 30-year yield declined to 2.47% from 2.49%.
On Monday, prices of top-quality municipal bonds were set higher. The yield on the benchmark 10-year general obligation was down four basis points to 1.84% from 1.88% on Friday, while the yield on 30-year GOs was also four basis points lower at 2.63% from 2.67% on Friday according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was at 96.3% on Monday compared to 95.6% on Friday, while the 30-year muni to Treasury ratio was at 105.6% versus 104.6%.
MSRB Reports Previous Session's Activity
The Municipal Securities Rulemaking Board reported 33,594 trades on Monday on volume of $5.926 billion.
Most active on Monday, based on the number of trades, was the New Jersey Transportation Trust Fund Authority transportation program bonds, Series AA 4 1/4s of 2044, which traded 164 times with an average price of 102.714 and an average yield of 3.878%.
