The municipal bond market was moving into a hesitant mode on Wednesday, ahead of the Federal Open Market Committee's afternoon statement on interest rates. Most analysts expect the Fed will not raise rates at this time, but the market always adopts a cautious stance ahead of the decision.
In the primary, several new deals are set to be priced after many sales came to market on Tuesday.
Secondary Market
Treasury prices were lower on Wednesday as the yield on the two-year Treasury note rose to 0.57% from 0.56% on Tuesday, while the 10-year yield increased to 2.05% from 1.98% and the 30-year yield rose to 2.76% from 2.67%.
The yield on the 10-year benchmark muni general obligation on Tuesday rose three basis points to 2.03% from 2.00% on Monday, while the yield on the 30-year GO increased by five basis points to 2.95% from 2.90%, according to the final read of MMD's triple-A scale.
The 10-year muni to Treasury ratio was calculated Tuesday at 102.5% versus 104.0% on Monday, while the 30-year muni to Treasury ratio stood at 110.2% compared to 111.1%, according to MMD.
Primary Market
Several new deals are slated to come to market on Wednesday.
Siebert, Brandford, Shank is expected to price the $275 million New York State Dormitory Authority's State University of New York's Series 2015A dormitory facilities revenue bonds for retail investors on Wednesday ahead of the institutional pricing on Thursday.
The SUNY issue is rated Aa3 by Moody's and AA-plus by S&P and Fitch.
DASNY is also expected to come to market on Wednesday with a $689 million revenue bond deal priced by JPMorgan for the Orange Regional Medical Center Obligation Group. The bonds are rated Ba1 by Moody's and BB-plus by S&P.
On April 9, DASNY came to market with more than $1 billion of bonds with issues for New York University, Columbia University and The New School. DASNY has ranked among the top 10 muni issuers in each of the past 10 years.
On Tuesday, the Humble Independent School District, Texas, competitively sold $218.10 million of Series 2015A unlimited tax school building and refunding bonds. Bank of America Merrill Lynch won the issue with a true interest cost of 3.0663%. The bonds are backed by the Texas Permanent School fund guarantee and rated triple-A by Moody's Investors Service and Standard & Poor's.
In the negotiated sector, Goldman, Sachs priced the Grossmont Healthcare District, Calif.'s $226.85 million of general obligation bonds. The bonds are rated Aa2 by Moody's. Goldman also priced the Illinois Housing Development Authority's $102 million of Series 2015 multifamily housing revenue floating-rate notes for the Marshall Field Garden Apartment Homes. The notes are FNMA-backed and rated triple-A by Moody's.
Bank of America Merrill Lynch priced the Nebraska Public Power Generation Agency's $186.89 million of Series 2015A revenue refunding bonds for the Whelan Energy Center's Unit 2. The issue is rated A2 by Moody's, BBB-plus by S&P and A-minus by Fitch Ratings. BAML also priced Tallahassee, Fla.'s $106.82 million of Series 2015A health facilities revenue refunding bonds for the Tallahassee Memorial Healthcare, Inc., Project. The bonds are rated Baa1 by Moody's.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 41,678 trades on Tuesday on volume of $9.931 billion.
The most active bond, based on the number of trades, was the Allen County, Ohio's Series 2015A hospital facilities revenue refunding and improvement 4s of 2044, which traded 275 times at an average price of 99.232 with an average yield of 4.044%. The bonds were initially priced at 96.634 to yield 4.20%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $334.4 million to $8.429 billion on Wednesday. The total is comprised of $4.297 billion competitive sales and $4.132 billion of negotiated deals.
