The municipal bond market sell-off continues on Tuesday, which is good news for buyers but possibly a negative for issuers, according to market participants. In the primary, healthcare deals are dominating the negotiated market, potentially providing buyers with a chance to add yield to their portfolios. There are also several water and sewer deals for investors who want get a state or county's name on their portfolio while also diversifying away from the more tradition general obligation issuances.
Primary
- One of the largest deals this week the Arizona Transportation Board's $456.5 million bonds, expected to be priced by JP Morgan on Tuesday. The bonds are rated Aa1 by Moody's Investors Service and AA-plus by Standard & Poor's.
- The retail order period for Baltimore's $409.8 million water and wastewater revenue bonds is scheduled for Tuesday. The deal consists of senior series bonds rated Aa2 by Moody's and AA by S&P, and a sub series of bonds carrying Aa3 from Moody's and a AA-minus from S&P. The institutional sale is expected Wednesday.
- For investors wanting to dip lower on the rating scale there is a deal rated Baa2 by Moody's and BBB by S&P: $148.4 million Chattanooga-Hamilton County Hospital Authority, Tenn., hospital revenue and refunding bonds for the Erlanger Health System. Barclays is the managing underwriter.
- Pulaski County, Ark., is selling $136.8 million public education facilities board healthcare revenue bonds for Baptist Health. The managing underwriter is Stephens Inc., and the deal contains serial bonds from 2016 to 2034, and term bonds in 2039, 2042 and 2044. The bonds are rated A-plus by S&P.
- The competitive calendar is topped by a $250 million Washington Suburban Sanitary Commission consolidated public improvement bonds. The deal is rated triple-A by all three major rating agencies.
- Fremont United School District is selling $140 million general obligation bonds rated Aa2 by Moody's and AA by S&P.
- Fort Lauderdale is also issuing $115.75 million water and sewer revenue refunding bonds rated Aa1 by Moody's and AA-plus by S&P.
- Finally there is a $175.2 million Spokane, Wash., water and wastewater system revenue bond deal. These are green bonds, and earned rating of Aa2 from Moody's and AA from S&P.
Scales
Municipal bonds' yields rose as much as one basis point for bonds maturing in two to 30 years, according to municipal market data. The rest of the curve held steady.
Treasuries strengthened on Tuesday with the two-year note yield dropping by three basis points to 0.51% from Monday's market close. The 10-year and 30-year also fell by one basis point each to 2.33% and 3.05%, respectively.
