The municipal bond market is awaiting the kickoff of this week's primary market activity, topped on Tuesday by the competitive sale of $1.3 billion New York State Urban Development Corp. in three separate issues.
The issues up for bid are the $372 million taxable state personal income tax revenue bonds; and the $424 million Group A and $515 million Group B state personal income tax revenue bonds.
The issue is rated triple-A by Standard & Poor's and Fitch Ratings. This issue is not rated by Moody's Investors Service, but in June the rating agency upgraded New York State's personal income tax revenue bonds to Aa1 from Aa2.
Primary Market
Among the top negotiated deals scheduled for Wednesday are:
- Texas Transportation Commission's $1.6 billion general obligation mobility fund bonds, scheduled to be priced by Bank of America Merrill Lynch.
- New York State Thruway Authority's $750 million general revenue refunding bonds to be priced by Goldman, Sachs.
- Miami-Dade County, Fla., $750 million aviation revenue refunding bonds, AMT and non-AMT, to be priced by Wells Fargo Securities.
- Phoenix Civic Improvement Corp.'s $610 million junior lien water system revenue bonds, to be priced by Bank of America Merrill Lynch.
- Long Island Power Authority's $440 million electric system general revenue bonds, to be priced by Bank of America Merrill Lynch.
- Advocate Health Care Network, Ill.'s $304 million serial bonds to be priced by J.P. Morgan Securities.
Also scheduled this week are:
- Harris County-Houston Sports Authority, Texas, $569 million senior lien revenue refunding bonds, taxable senior lien revenue refunding bonds and second lien revenue refunding bonds, to be priced by Morgan Stanley.
- Pennsylvania Turnpike Commission $300 million revenue bonds to be priced by PNC Capital Markets.
On the competitive sale calendar for Wednesday are:
- $525 million New Jersey general obligation bonds.
- $140 million Los Angeles County MTA, Calif., revenue bonds.
Secondary Market
At the close on Monday, municipal bond yields were lower, with the benchmark 10-year general obligation yield down two basis points to 2.06% from Friday's close of 2.08% and 30-year GO was off two basis points to 2.99% from 3.01% on Friday, according to the final read of MMD's triple-A scale.
Treasury Market
On Tuesday, Treasury prices were lower, with the two-year note yield at 0.52% from 0.49% on Monday. The 10-year yield was at 2.25% from 2.22% while the 30-year was at 2.98% from 2.95% on Monday.
On Monday, the 10-year muni-to-Treasury ratio closed at 92.8% versus 95.6% on Friday. The 30-year muni to Treasury ratio closed at 101.4%, compared with 104.0% on Friday. The ratio is calculated by taking the yield on a triple-A rated muni and comparing it to the yield on a Treasury of the same maturity. The higher the ratio, the more attractive munis are to Treasuries.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 33,812 trades on Monday for volume of $8.850 billion.
Most active on Monday, based on the number of trades, was the New Jersey State Trust Fund Authority's Transportation Program's 2014 Series AA 4¼s of 2044 which traded 153 times with an average price of 99.396 for an average yield of 4.279%.
