Municipal bond traders on Wednesday will be looking at the direction of yields, which has been trending lower in the past few sessions.
The market will see several deals of size coming from the Golden State hit the screens, topped by a California green bond sale.
Secondary market
U.S. Treasuries were narrowly mixed on Wednesday. The yield on the two-year Treasury was unchanged from 1.31% on Tuesday as the 10-year Treasury yield dipped to 2.27% from 2.28% while the yield on the 30-year Treasury bond decreased to 2.93% from 2.94%.
Municipal bonds finished stronger on Tuesday. The yield on the 10-year benchmark muni general obligation fell two basis points to 1.97% from 1.99% on Monday, while the 30-year GO yield declined three basis points to 2.82% from 2.85%, according to the final read of Municipal Market Data's triple-A scale.
Since the start of the year, the 10-year muni yield has fallen 35 basis points while the 30-year yield has dropped 23 basis points. On Jan. 3, the 10-year muni stood at 2.32% while the 30-year was at 3.05%.
On Tuesday, the 10-year muni to Treasury ratio was calculated at 86.3%, compared with 88.3% on Monday, while the 30-year muni to Treasury ratio stood at 95.8%, versus 97.8%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 40,590 trades on Tuesday on volume of $11.05 billion.
Primary market
Stifel is set to price the California Pollution Control Financing Authority’s $220 million of Series 2017 solid waste disposal revenue green bonds for the CalPlant 1 project.
The issue is not rated.
Since 2007, the California PCFA has sold about $2.79 billion of securities, with the most issuance occurring in 2012 when it sold $828 million. The authority did not come to market in 2013 and has sold under $100 million four times over the past 10 years.
RBC Capital Markets is expected to price the Chaffey Joint Union High School District, Calif.’s $100 million of election of 2012 Series C general obligation bonds.
The deal is rated Aa1 by Moody’s Investors Service and AA-minus by S&P Global Ratings.
In the competitive arena on Wednesday, the San Francisco Municipal Transportation Agency will sell $173.1 million of Series 2017 revenue bonds.
The deal is rated Aa2 by Moody’s and AA by S&P.
Bond Buyer 30-day visible supply
The Bond Buyer's 30-day visible supply calendar decreased $615.9 million to $12.11 billion on Wednesday. The total is comprised of $4.40 billion of competitive sales and $7.71 billion of negotiated deals.
