Municipal bond traders are set to see a second big wave of volume sweep over the market on Wednesday, led by two big New York issuers.
Secondary Market
Treasuries were stronger on Wednesday. The yield on the two-year Treasury declined to 0.78% from 0.80% on Tuesday, the 10-year Treasury yield dropped to 1.71% from 1.73% and the yield on the 30-year Treasury bond decreased to 2.45% from 2.47%.
Top-rated municipal bonds were weaker on Tuesday. The yield on the 10-year benchmark muni general obligation rose five basis points to 1.57% on Tuesday from 1.52% on Monday, while the yield on the 30-year rose five basis points to 2.28% from 2.23%, according to the final read of Municipal Market Data's triple-A scale.
On Tuesday, the 10-year muni to Treasury ratio was calculated at 90.6% compared to 91.1% on Monday, while the 30-year muni to Treasury ratio stood at 92.4% versus 93.1%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 36,408 trades on Tuesday on volume of $11.09 billion.
Primary Market
On Wednesday, Goldman Sachs is expected to price the New York Metropolitan Transportation Authority's $1.06 billion of Hudson Rail Yards Trust obligation bonds.
The deal is rated A2 by Moody's Investors Service and A-minus by Kroll Bond Rating Agency.
Ramirez & Co. is set to price the New York City Transitional Finance Authority's $800 million of tax-exempt Fiscal 2017 Series B Subseries B-1 future secured subordinate bonds for institutions on Wednesday after holding a two-day retail order period.
Ramirez priced the issue for retail on Tuesday to yield from 0.85% with 4% and 5% coupons in a spilt 2019 maturity to approximately 3.014% with a 3% coupon in 2042. No retail orders were taken in the 2031, 2034 or 2036-2039 maturities. A 2018 maturity was offered as a sealed bid.
On Monday, the issue was priced for retail to yield from 0.84% with 4% and 5% coupons in a spilt 2019 maturity to 3% at par in 2042.
The deal is expected to be rated Aa1 by Moody's and rated triple-A by S&P Global Ratings and Fitch Ratings.
The NYC TFA will also offer two competitive sales of taxable bonds on Wednesday, consisting of $62.5 million of Fiscal 2017 Series B Subseries B-3 future secured subordinate bonds and $187.51 million of Fiscal 2017 Series B Subseries B-2 future secured subordinate bonds.
Wells Fargo Securities is set to price Rochester, Minn.'s $290 million of Series 2016B healthcare facilities revenue bonds for the Mayo Clinic. The deal is rated Aa2 by Moody's and AA by S&P.
Bank of America Merrill Lynch is expected to price the Mississippi Hospital Equipment and Facilities Authority's $288.52 million of Series 2016A healthcare revenue and Series 2016B taxable healthcare revenue bonds for Baptist Memorial Health. The deal is rated A by S&P.
Citigroup is set to price the Dallas Area Rapid Transit's $219 million of Series 2016B senior lien sales tax revenue refunding bonds. The deal is rated Aa2 by Moody's and AA-plus by S&P.
RBC Capital Markets is expected to price the Louisiana Public Facilities Authority's $226.14 million of Series 2016A&B lease revenue bonds for the Provident Group-LSU Nicholson Gateway Project. The deal is rated A3 by Moody's and A by Fitch.
JPMorgan Securities is set to price Louisiana's $211.92 million of Series 2016A general obligation bonds. The deal is rated Aa3 by Moody's, AA by S&P and AA-minus by Fitch.
Back in the competitive arena, the Virginia Public Building Authority on Wednesday will offer three separate issues totaling $550 million.
The deals consist of $385.92 million of Series 2016A public facilities revenue bonds and Series 2016B refunding bonds; $150.75 million of Series 2016C public facilities revenue bonds subject to the alternative minimum tax and $13.72 million of Series 2016D taxable public facilities revenue bonds.
All three sales are rated Aa1 by Moody's and AA-plus by S&P and Fitch.
Since 2006, the PBA has sold about $3.8 billion of debt, with the largest issuance occurring in 2010 when it sold about $651 million. In the same period, the authority has issued less than $300 million five times. The lowest year of issuance came in 2012 when it issued $72.4 million.
Seattle, Wash., is competitively selling $151 million of Series 2016C municipal light and power improvement and refunding revenue bonds. The deal is rated Aa2 by Moody's and AA by S&P.
Rutherford County, Tenn., is competitively selling $101 million of Series 2016B general obligation public improvement and school bonds. The deal is rated Aa1 by Moody's and AA-plus by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $3.52 billion to $15.75 billion on Wednesday. The total is comprised of $3.75 billion of competitive sales and $11.998 billion of negotiated deals.
