Municipal bonds were unchanged at mid-session as traders on Wednesday as traders look to see several deals of size coming from the Golden State hit the screens, topped by a California green bond sale.

Secondary market
The yield on the 10-year benchmark muni general obligation was unchanged from 1.97% on Tuesday, while the 30-year GO yield was flat from 2.82%, according to a read of Municipal Market Data's triple-A scale.

“After notably outperforming Treasuries on Tuesday, tax-exempt bonds were opening with a more mixed and steady tone Wednesday ahead of this afternoon's FOMC minutes from the Fed's May 2-3 meeting,” MMD Municipal Research Analyst Greg Saulnier wrote in market comment.

Lindsey Piegza, Chief Economist at Stifel Fixed Income, said the FOMC minutes were “likely to reveal a relatively optimistic Fed with many Committee members expecting [the economic] weakness early on in 2017 to prove 'transitory.' "

She said that “according to Bloomberg, the probability of a rate hike at the upcoming June 14th FOMC meeting remains elevated at near 100%.”

U.S. Treasuries were a bit weaker on Wednesday. The yield on the two-year Treasury rose to 1.32% from 1.31% on Tuesday as the 10-year Treasury yield gained to 2.29% from 2.28% while the yield on the 30-year Treasury bond increased to 2.95% from 2.94%.

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
Saulnier said with only two more full sessions due to Friday’s half-day session ahead of the Memorial Day weekend, the primary calendar should all but wrap up on Wednesday.

In the competitive arena on Wednesday, the San Francisco Municipal Transportation Agency sold $173.1 million of Series 2017 revenue bonds.

Wells Fargo Securities won the bonds with a true interest cost of 3.33%.

The issue was priced to yield from 0.72% with a 5% coupon in 2018 to 3.31% with a 4% coupon in 2042. A 2046 maturity was priced as 4s to yield 3.39% and a 2047 maturity was priced as 3 1/2s to yield approximately 3.568%.

The deal is rated Aa2 by Moody’s and AA by S&P.

Additionally, Piper Jaffrey priced the Mayor and City Council of Baltimore’s Convention Center Hotel, Md.’s $272.17 million of Series 2017 revenue refunding bonds.

The issue was priced to yield from 1.41% with a 3% coupon in 2018 to 3.88% with a 5% coupon in 2037. A 2039 maturity was priced as 5s to yield 3.91%, a 2042 maturity was priced as 5s to yield 3.93% and a 2046 maturity was priced as 5s to yield 3.96%.

The deal is rated BBB-minus by S&P.

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.

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.

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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.