Municipal market participants are ready for another busy week, with volume exceeding $8 billion for the second consecutive week, something that has not happened for a while.
U.S. Treasuries were mostly weaker on Monday morning. The yield on the two-year Treasury was steady at 1.29% from Friday, while the 10-year Treasury yield rose to 2.34% from 2.33%, and the yield on the 30-year Treasury bond increased to 3.01% from 2.99%.
Municipal bonds finished stronger on Friday. The yield on the 10-year benchmark muni general obligation fell five basis points to 2.11% from 2.16% on Thursday, while the 30-year GO yield declined three basis points to 2.98% from 3.01%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 90.6% on Friday, compared with 90.1% on Thursday, while the 30-year muni to Treasury ratio stood at 99.6%, versus 99.1%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 36,016 trades on Friday on volume of $12.684 billion.
Prior week's actively traded issues
Revenue bonds comprised 56.97% of new issuance in the week ended May 12, up from 56.78% in the previous week, according to Markit. General obligation bonds comprised 37.12% of total issuance, down from 37.13%, while taxable bonds made up 5.91%, down from 6.09%.
Some of the most actively traded issues by type were from California and Ohio.
In the GO bond sector, the San Francisco Bay Area Rapid Transit District, Calif., 5s of 2047 were traded 20 times. In the revenue bond sector, the Cuyahoga County, Ohio, 5.5s of 2057 were traded 61 times. And in the taxable bond sector, the University of California 3.063s of 2025 were traded 43 times.
Ipreo estimates volume will hold steady at $8.8 billion, after a revised total of $8.9 billion sold in the past week, according to updated figures from Thomson Reuters. The calendar for the week ahead is composed of $7.17 billion of negotiated deals and $1.62 billion of competitive sales.
There are no large deals scheduled to be priced for institutions Monday, as is typical, with action starting on Tuesday.
Morgan Stanley is scheduled to price the week’s largest issue, Los Angeles Unified School District’s $1.08 billion of general obligation refunding and dedicated unlimited ad valorem property tax bonds, on Tuesday. The deal is rated Aa2 by Moody’s Investors Service and AAA by Fitch Ratings.
Wells Fargo plans to price the Dormitory Authority of the State of New York’s $665 million of revenue tax exempt bonds and taxable bonds for New York University on Tuesday following indications of interest Monday. The Series A tax-exempt bonds are expected to mature serially from 2019 through 2038, with a term bond in 2043, while the Series B taxable bonds are expected to mature serially from 2019 through 2032, with terms in 2039 and 2047. The deal is rated Aa2 by Moody’s and AA-minus by S&P Global Ratings.
The largest competitive sale will come from the Phoenix Civic Improvement Corp., when it auctions $215.87 million of subordinate excise tax revenue and refunding bonds Tuesday.