With a handful of deals placed on the day-to-day calendar due to market volatility, municipal market participants are waiting to see what deals price Wednesday.
Secondary Market
U.S. Treasuries were mixed mostly weaker on Wednesday morning. The yield on the two-year rose to 1.01% from 1.00% on Tuesday, the 10-year Treasury was higher at 2.24% from 2.23%, while the yield on the 30-year Treasury bond decreased to 2.93% from 2.96%.
Munis finished the day weaker again on Tuesday, as the yield on the 10-year benchmark muni general obligation was three basis points higher to 2.19% from 2.16% on Monday, while the yield on the 30-year increased three basis points to 3.01% from 2.98%, according to a final read of MMD's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 97.9% on Tuesday compared to 97.2% on Monday, while the 30-year muni to Treasury ratio stood at 101.3% versus 99.9%, according to MMD.
Primary Market
There are no competitive deals larger than $100 million on the schedule for Wednesday and municipal market participants will be waiting to see what deals price, as yields on both the 10-year and 30-year have jumped 25 basis points in the past two days.
Among deals placed on day-to-day status were Katy, Texas, Independent School District's $225 million of refunding bonds, Public Hospital District No. 1 of King County, Wash.'s, $186 million of limited tax general obligation bonds, Montgomery County Municipal Utility District No. 13, Texas's, $141 million of road and limited tax refunding bonds and the state of Mississippi's $223 million of GO refunding bonds.
Jefferies is expected to price TSASC Inc.'s $1.02 billion tobacco settlement bond deal on Wednesday. The issue will consist of $584.39 million of Fiscal 2017 Series senior bonds and $440 million of Fiscal 2017 Series B subordinate bonds. Proceeds will primarily be used to refund TSASC's outstanding bonds. TSASC is a local development corporation that issues debt secured by tobacco settlement revenues, which cigarette companies pay as part of the 1998 master settlement agreement with 46 states.
RBC Capital Markets is expected to price the Los Angeles Department of Airports' $661.88 million of Series 2016B subordinate revenue bonds, subject to the alternative minimum tax, Series 2016C taxable senior refunding revenue bonds on Tuesday. The Series 2016B bonds are rated A1 by Moody's Investors Service and AA-minus by S&P and Fitch Ratings and the Series 2016C bonds are rated Aa3 by Moody's and AA by S&P and Fitch.
Morgan Stanley is on the docket to price Cincinnati, Ohio's $192.890 million of water system revenue bonds and water system refunding revenue bonds.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 52,317 trades on Tuesday on volume of $14.454 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $2.437 billion to $12.97 billion on Wednesday. The total is comprised of $3.08 billion of competitive sales and $9.89 billion of negotiated deals.
