Municipal market participants are looking forward to the first new institutional issuance of the week, as two big names from New York State are expected to hit the market.
Secondary Market
U.S. Treasuries were weaker on Tuesday. The yield on the two-year Treasury rose to 1.17% from 1.15% on Monday, while the 10-year Treasury gained to 2.42% from 2.41%, and the yield on the 30-year Treasury bond increased to 3.06% from 3.05%.
Top-shelf municipal bonds ended stronger on Monday. The 10-year benchmark muni general obligation yield fell three basis points to 2.30% from 2.33% on Friday, while the yield on the 30-year GO dropped one basis point to 3.08% from 3.09%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 95.4% on Monday compared to 93.6% on Friday, while the 30-year muni to Treasury ratio stood at 101.1%, versus 99.3%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,460 trades on Monday on volume of $8.04 billion.
Primary Market
On Monday, Citigroup held the second day of a two-day retail order period for New York City's $800 million of Fiscal 2017 Series C and D general obligation bonds ahead of the institutional pricing on Tuesday.
The $780.89 million of Fiscal 2017 Series C bonds were priced on Monday for retail to yield from 1.29% with 3% and 5% coupons in a split 2019 maturity to 3% at par in 2029; a 2018 maturity was offered as a sealed bid.
The $19.18 million of Fiscal 2017 Series D bonds were priced for retail on Monday to yield from 1.29% with a 3% coupon in 2019 to 3% at par in 2029; the 2017 and 2018 maturities were offered as sealed bids.
The deal is rated Aa2 by Moody's Investors Service and AA by S&P Global Ratings and Fitch Ratings.
On Tuesday, JP Morgan is expected to price the Dormitory Authority of the State of New York's $242 million of obligated group revenue bonds for the Orange Regional Medical Center. The deal is rated Baa3 by Moody's and BB-plus by Fitch.
Since 2007, DASNY has issued over $58 billion of debt, with the most issuance occurring in 2015, when it issued $9.09 billion of bonds and was the biggest muni issuer of the year by par amount. DASNY's smallest issuance came in 2013, when it sold $3.03 billion of securities.
Topping the week's slate is a $1.15 billion deal from the Trustees of California State University. Goldman Sachs is set to price the taxable and tax-exempt system-wide revenue bonds for institutions on Wednesday. The deal is rated Aa2 by Moody's Investors Service and AA-minus by S&P Global Ratings.
On Wednesday, Citi is expected to price the Salt Lake Department of Airports' $952 million of airport revenue bonds, consisting of Series 2017A bonds subject to the alternative minimum tax and Series 2017B non-AMT bonds. The deal is rated A2 by Moody's and A-plus by S&P.
Citi is also expected to price the state of Oregon's $491 million of tax-exempt and taxable GOs for state seismic and energy projects. The taxables are seen being priced on Tuesday while the tax-exempts are set for Wednesday. The deal is rated Aa1 by Moody's and AA-plus by S&P and Fitch.
In the competitive arena, the biggest bond sale is coming from the Fairfax County Water Authority, Va., which is selling $198.58 million of water revenue and refunding revenue bonds on Thursday. The deal is rated triple-A by Moody's, S&P and Fitch.
In the short-term competitive sector, the New York Metropolitan Transportation Authority is set to sell $700 million of notes in two separate sales on Wednesday. The offerings consist of $500 million of Series 2017 Subseries 2017A-1 transportation revenue bond anticipation notes and $200 million of Series 2017 Subseries 2017B-1 transportation revenue bond anticipation notes. The BANs are rated MIG1 by Moody's, SP1-plus by S&P and F1 by Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $152.8 million to $10.77 billion on Tuesday. The total is comprised of $2.04 billion of competitive sales and $8.73 billion of negotiated deals.
