Municipal bond traders were awaiting the pricings of some hefty new issues, led by deals in California and Indiana.
Secondary Market
Treasury prices were lower on Wednesday, with the yield on the two-year Treasury note rising to 0.67% from 0.64% on Tuesday, while the 10-year yield rose to 2.42% from 2.40% and the 30-year yield increased to 3.21% from 3.19%.
The yield on the 10-year benchmark muni general obligation closed steady on Tuesday at 2.33%, unchanged from Monday, while the yield on the 30-year GO was flat at 3.31%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Tuesday at 95.6% versus 96.2% on Monday, while the 30-year muni to Treasury ratio stood at 102.9% compared to 103.3%, according to MMD.
Primary Market
JPMorgan will price the California State University Trustees' $1.04 billion of revenue bonds for institutions on Wednesday after a one-day retail order period on Tuesday.
The Series 2015A tax-exempts were priced for retail to yield from 0.74% with 2% and 5% coupons in a split 2017 maturity to 3.38% with a 5% coupon in 2035; and part of a 2043 split term bond was priced as 4s to yield 4.04%.The 2015 and 2016 maturities were offered as sealed bids. No retail orders were taken in the 2028-2029, 2031-2034, 2036-2038, 2043 or 2047 maturities.
The bonds are rated Aa2 by Moody's Investors Service and AA-minus by Standard & Poor's.
Since 1996, the Trustees of the California State University have issued roughly $6.75 billion of debt. The years that saw the most issuance were in 2005 and 2014, when the university issued $1.34 billion and $748 million of debt, respectively. The university did not come to market in 1997, 2001 or 2006.
Bank of America Merrill Lynch is slated to price the Indiana Toll Road ITR Concession Co.'s $1 billion of senior secured notes on Wednesday, just months after the original private owner of the publicly owned toll road went bankrupt.
The new owner, Australian fund manager fund IFM Investors, is set to complete the financing of its takeover bid with next week's sale. The 157-mile Indiana Toll Road is a key link between Chicago and the East Coast.
Fitch and S&P both rate the bonds BBB, which will be issued by IFM's subsidiary ITR Concession Co.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,915 trades on Tuesday on volume of $7.798 billion.
The most active bond, based on the number of trades, was the New Jersey State Transportation Trust Fund Authority's Series 2011B transportation system 5s of 2042, which traded 103 times at an average price of 101.999, an average yield of 4.61%. The bonds were initially priced at 99.223.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $1.73 billion to $12.37 billion on Wednesday. The total is comprised of $2.66 billion competitive sales and $9.71 billion of negotiated deals.
