The week's estimated $9.1 billion of issuance will start to roll in on Tuesday, as three of the four largest deals are expected to price.
Secondary Market
U.S. Treasuries were weaker on Tuesday morning. The yield on the two-year rose to 0.86% from 0.85% from Monday, the 10-year Treasury yield gained to 1.86% from 1.83% and the yield on the 30-year Treasury bond increased to 2.62% from 2.58%.
Munis ended Monday stronger , as the yield on the 10-year benchmark muni general obligation was one basis point lower to 1.73% from 1.74% on Friday, while the yield on the 30-year was one basis point lower to 2.56% from 2.57%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 85.9% on Monday compared to 94.1% on Friday, while the 30-year muni to Treasury ratio stood at 88.9% versus 98.1%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 33,215 trades on Monday on volume of $9.66 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $176 million to $13.17 billion on Tuesday. The total is comprised of $2.99 billion of competitive sales and $10.18 billion of negotiated deals.
Primary Market
The week's issuance will start to roll out on Tuesday, as market participants are expected to be kept busy with $9.1 billion of estimated volume.
Citi priced the Port Authority of New York and New Jersey's $588.020 million of bonds, which features alternative minimum tax and non-AMT portions for retail investors on Monday, prior to institutional pricing on Tuesday. The $238.020 million of consolidated AMT bonds were priced for retail to yield from 1.05% with a 5% coupon in 2018 to 1.60% with a 5% coupon in 2021. The bonds were also priced to yield from 2.89% with a 5% coupon in 2032 to 3.07% with a 5% coupon in 2036. A term bond in 2041 was priced to yield 3.17% with a 5% coupon. The 2017 maturity was offered as a sealed bid.
The $350 million of consolidated non-AMT bonds were priced for retail to yield from 2.15% with a 5% coupon in 2027 to 2.28% with a 5% coupon in 2028, 2.45% with a 5% coupon in 2030 and from 2.65% with a 5% coupon in 2033 to 2.77% with a 5% coupon in 2036. A term bond in 2041 was priced to yield 2.87% with a 5% coupon, a term bond in 2046 was priced to yield 2.92% with a 5% coupon and a term bond in 2056 was priced to yield 3.07% with a 5.25% coupon. The deal is rated Aa3 by Moody's Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings.
Since 2006, the Port Authority has sold roughly $23.8 billion of securities, with the most issuance occurring in 2012 when it sold $3.69 billion. The authority has sold over $1 billion in every year since 2006 and has sold more than $2 billion five times during that span. Tuesday's sale will put the authority over the $1 billion mark for the year.
Bank of America Merrill Lynch is expected to run the books on Chicago's $1.055 billion of O'Hare International Airport general senior lien revenue refunding bonds. The deal is rated A by S&P and Fitch.
Goldman is slated to price the Dormitory Authority of the State of New York's $408 million of taxable and tax-exempt bonds for The New School on Tuesday. The deal is rated A3 by Moody's and A-minus by S&P.
There are three large competitive deals on the docket for Tuesday, the largest being $239.17 million of unlimited tax GO and refunding bonds from Bellevue, Wash., School District No. 405. The deal is backed by the Washington State School District Credit Enhancement Program and is rated Aa1 by Moody's and AA-plus by S&P.
The state of Ohio is scheduled to sell $150 million of infrastructure improvement GO bonds. The deal is rated Aa1 by Moody's and AA-plus by S&P and Fitch.
The North Kansas City School District No. 74 in Missouri will sell $114 million of GO improvement bonds for the Missouri Direct Deposit Program. The deal is rated Aa1 by Moody's and AA-plus by S&P.
