Municipal bond market participants are girding for the week's second round of new supply with deals set to come to market in both the competitive and negotiated sectors.
Traders were keeping an eye on muni yields which have been on the rise since the beginning of the month.
Secondary Market
Treasury prices were lower on Wednesday with the yield on the two-year Treasury note rising to 0.73% from 0.70% on Tuesday, while the 10-year yield increased to 2.47% from 2.41% and the 30-year yield rose to 3.17% from 3.15%.
The yield on the 10-year benchmark muni general obligation on Tuesday closed up one basis point to 2.36% from 2.35% on Monday, while the yield on the 30-year GO rose two basis points to 3.33% from 3.31%, according to the final read of Municipal Market Data's triple-A scale.
Since June 1, yields on the 10-year muni and the 30-year muni yield are each up by 14 basis points.
The 10-year muni to Treasury ratio was calculated on Tuesday at 97.6% versus 98.8% on Monday, while the 30-year muni to Treasury ratio stood at 105.7% compared to 106.7%, according to MMD.
Primary Market
On Wednesday, the city of Atlanta is scheduled to competitively offer $252 million of Series 2015 GO public improvement bonds.
First Southwest and Grant & Associates are co-financial advisors for Atlanta's offering. Hunton & Williams and the Haley Law Firm are co-bond counsel and Greenberg Traurig and Riddle & Schwartz are co-disclosure counsel.
The bonds are rated Aa2 by Moody's Investors Service, AA by Standard & Poor's and AA-plus by Fitch Ratings.
Atlanta last sold comparable bonds competitively on March 5, 2007, when Wachovia Bank bought $8 million of Series 2007A various purpose GOs with a TIC of 3.98%.
Issuance of GO debt has not been frequent in the A. Since 1995, Atlanta has only sold about $875 million of bonds with the most issuance occurring in 1998 and 2005 when the city offered $102 million and $94 million, respectively. The city sold no debt in 2006 or in 2010 through 2013.
RBC Capital Markets priced Miami-Dade County, Fla.'s $537.68 million deal for retail investors on Tuesday ahead of the institutional pricing on Wednesday.
The $499.12 million of Series 2015A aviation revenue and refunding bonds, subject to the alternative minimum tax, were priced for retail to yield from 1.30% with a 5% coupon in 2017 to 4.42% with a 4.25% coupon in 2036; a 2038 maturity was priced as 5s to yield 4.21% and a 2045 maturity was priced as 4 1/2s to yield 4.61%. A 2016 maturity was offered as a sealed bid.
The $38.57 million of Series 2015B non-AMT aviation revenue refunding bonds were priced for retail as 5s to yield 2.93% in 2025, 3.11% in 2026 and 3.27% in 2027. The deal was rated A by S&P and Fitch and AA-minus by Kroll Bond Rating Agency.
RBC is also expected to price the Cleveland Municipal School District, Ohio's $200 million of unlimited tax Series 2015 tax-exempt and Series 2015B taxable general obligation bonds on Wednesday. The deal is backed by the Qualified School Construction Bond Program, Direct Payment, and rated Aa2 by Moody's and AA by S&P and Fitch.
And Citi is slated to price the Erie County Industrial Development Agency, N.Y.'s $240.18 million of Series 2015A school facility refunding revenue bonds for the Buffalo City School District on Wednesday.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 42,081 trades on Tuesday on volume of $10.047 billion.
The most active bond, based on the number of trades, was the Houston, Texas, Higher Education Finance Corp.'s Series 2014A revenue and refunding bonds for the Harmony Public Schools 4s of 2038, which traded 170 times at an average price of 99.477 with an average yield of 4.005%. The bonds were initially priced at 99.392 to yield 4.04%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $1.83 billion to $10.72 billion on Wednesday. The total is comprised of $4.30 billion competitive sales and $6.41 billion of negotiated deals.
