The municipal bond market is prepped for the second wave of new issuance to price on Wednesday, as more supply is set to hit the screens in both the negotiated and competitive sectors.

Secondary Market

U.S. Treasuries were slightly stronger on Wednesday. The yield on the two-year Treasury dropped to 1.18% from 1.19% on Tuesday, while the 10-year Treasury yield decreased to 2.37% from 2.38%, and the yield on the 30-year Treasury bond declined to 2.96% from 2.97%.

Top-rated municipal bonds finished stronger on Tuesday. The 10-year benchmark muni general obligation yield fell one basis point to 2.22% from 2.23% on Monday, while the yield on the 30-year GO dropped one basis point to 2.97% from 2.98%, according to the final read of Municipal Market Data's triple-A scale.

The 10-year muni to Treasury ratio was calculated at 93.3% on Tuesday compared to 93.9% on Monday, while the 30-year muni to Treasury ratio stood at 100.0%, versus 100.4%, according to MMD.

MSRB: Previous Session's Activity

The Municipal Securities Rulemaking Board reported 42,267 trades on Tuesday on volume of $9.10 billion.

Primary Market

On Wednesday, Morgan Stanley is expected to price the U.S. Virgin Islands Public Finance Authority's $216.35 million of Series 2016A senior lien working capital bonds and Series 2016B subordinate lien working capital bonds.

The deal is rated BB by S&P Global Ratings and Fitch Ratings.

Morgan Stanley is also set to price the Regents of the University of Michigan's $449.24 million of Series 2017A general revenue bonds.

Since 2007, the University of Michigan Regents has issued about $2.71 billion of debt, with the largest issuance occurring in 2010 when it sold roughly $567 million of debt. The school did not come to market at all in 2011 or 2016. Wednesday's sale will mark the highest issuance since 2012.

Piper Jaffray is expected to price the University of Connecticut's $300 million of Series 2017A GOs on Wednesday.

The deal is rated Aa3 by Moody's Investors Service and AA-minus by S&P and A-plus by Fitch.

Bank of America Merrill Lynch is set to price the Illinois Finance Authority's $198 million of Series 2017A revenue bonds for Edward-Elmhurst Healthcare on Wednesday.

The deal is rated A by S&P and Fitch.

In the competitive sector, the Highline School District No. 401, Wash., is selling $206.895 million of Series 2017 unlimited tax general obligation bonds.

The deal, backed by the Washington state credit enhancement program, is rated Aa1 by Moody's and AA-plus by S&P.

Seattle, Wash., is competitively selling $189.665 million of Series 2017 water system improvement and refunding revenue 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 $2.18 billion to $15.83 billion on Wednesday. The total is comprised of $3.80 billion of competitive sales and $12.03 billion of negotiated deals.

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