The municipal bond market on Tuesday will be seeing even more supply head its way with the second day of retail orders being held on the New York City Transitional Finance Authority’s $1 billion of building aid revenue bonds and deals expected from Los Angles and Philadelphia.

Secondary market
Treasuries were weaker on Tuesday. The yield on the two-year Treasury rose to 1.39% from 1.37% on Monday, the 10-year Treasury yield gained to 2.38% from 2.37% and the yield on the 30-year Treasury bond increased to 2.93% from 2.92%.

The yield on the 10-year benchmark muni general obligation was unchanged Monday from 2.05% on Friday, while the 30-year GO yield increased one basis point to 2.86% from 2.85%, according to the final read of Municipal Market Data's triple-A scale.

On Monday, the 10-year muni to Treasury ratio was calculated at 86.5%, compared with 85.7% on Friday, while the 30-year muni to Treasury ratio stood at 97.8% versus 97.1%, according to MMD.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 41,467 trades on Monday on volume of $6.91 billion.

Primary market
On Tuesday, Bank of America Merrill Lynch will be holding a second day of taking retail orders on the New York City Transitional Finance Authority’s $1.01 billion of Fiscal 2018 Series S-1 and S-2 building aid revenue bonds for retail investors. The bonds will be priced for institutions on Wednesday.

On Monday, the $805.68 million of Series S-1 BARBs were priced to yield from 1.14% with a 5% coupon in 2019 to 2.38% with a 5% coupon in 2027, 3.10% with a 3% coupon in 2031, 3.04% with a 5% coupon in 2035 and 3.37% with a 4% coupon in 2036. No retail orders were taken in the 2028-2030 or 2032-2034 maturities.

The $200.49 million of Series S-2 BARBs were priced to yield from 0.94% with a 2% coupon in 2018 to 2.54% with a 5% coupon in 2028, 2.74% with a 5% coupon in 2030, 3.04% with a 5% coupon in 2035 and 3.07% with a 5% coupon in 2036. No retail orders were taken in the 2029 or 2031-2034 maturities.

The deal is rated Aa2 by Moody’s Investors Service and AA by S&P Global Ratings and Fitch Ratings.

On Tuesday, BAML is expected to price Los Angeles’ $320 million of subordinate revenue bonds for the Los Angeles International Airport consisting of Series 2017A bonds, subject to the alternative minimum tax, and Series 2017B non-AMT bonds.

The deal is rated A1 by Moody’s and AA-minus by S&P and Fitch.

JPMorgan Securities is expected to price the Aldine Independent School District, Texas’ $378.54 million of Series 2017A unlimited tax school building and refunding bonds on Tuesday.

The deal is rated triple-A by Moody’s and S&P.

Citigroup is set to price Philadelphia’s $348 million of Series 2017 general obligation bonds on Tuesday.

The deal is rated A2 by Moody’s, A-plus by S&P and A-minus by Fitch.

Since 2007, the city of brotherly love has sold $7.91 billion of debt, with the highest issuance in 2010 when it sold roughly $1.36 billion. Issuance was lowest in 2012 when it sold $92 million. With Tuesday’s sale, the city has more issuance so far this year than it did in 2016.

In the competitive arena on Tuesday, the Lewisville Independent School District, Texas, is selling $202.53 million of Series 2017 unlimited tax school building GOs.

The deal, which is backed by the Permanent School Fund guarantee program, is rated AAA by S&P and Fitch.

Also on Tuesday, the South Carolina Transportation Infrastructure Bank is selling $188.62 million of Series 2017A revenue refunding bonds.

The deal is rated A1 by Moody’s and A by Fitch.

Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar decreased $89.8 million to $12.98 billion on Tuesday. The total is comprised of $4.06 billion of competitive sales and $8.92 billion of negotiated deals.

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Chip Barnett

Chip Barnett

Chip Barnett is a journalist with more than 40 years of experience. Barnett is currently Senior Market Reporter for The Bond Buyer.
Aaron Weitzman

Aaron Weitzman

Aaron Weitzman is a markets reporter for The Bond Buyer, focusing on the sell side of the municipal bond market.