The municipal bond market was awaiting the pricing of the biggest deal of the week - the North Texas Tollway Authority's $871 million toll road offering.
On Tuesday, prices of top-rated municipal bonds finished weaker, traders said.
Secondary Market
Treasury prices were mixed on Wednesday. The yield on the two-year Treasury note was unchanged at 0.52% on Tuesday, while the 10-year yield remained at 1.89% as the 30-year yield slipped to 2.52% from 2.53%.
Prices of top-quality munis closed lower on Tuesday. The yield on the 10-year benchmark muni general obligation rose by one basis point to 1.92% from 1.91% on Monday, while the yield on 30-year GO increase one basis point to 2.80% from 2.79%, according to the final read of MMD's triple-A scale.
On Tuesday, the 10-year muni to Treasury ratio was calculated at 101.5% versus 100.4% on Monday, while the 30-year muni to Treasury ratio stood at 110.8% compared to 108.7%.
Primary Market
On Wednesday, the North Texas Tollway Authority's $871 million toll road deal is expected to be priced by JPMorgan.
The authority is looking to cut its annual debt service by $80 million through the issuance. The issue is comprised of second-tier revenue bonds, which carry ratings a notch lower than the first-tier bonds. This deal is rated A3 by Moody's and BBB-plus by S&P.
The authority has more than $1 billion of second-tier and $6.3 billion of first-tier bonds outstanding. Since 1997, the authority has sold a total of almost $13 billion of revenue bonds. The largest issuances were in 2008 and 2009 when $5.19 billion and $1.77 billion were sold, respectively. No bonds were sold in 1992, 2000-2002, 2004, 2006-2007 or 2013.
Also on Wednesday, North Carolina will sell $225 million of general obligation bonds in the competitive arena. The GOs are rated triple-A by Moody's, S&P and Fitch Ratings.
North Carolina last sold bonds on April 16, 2014, when Morgan Stanley won $206.69 million of Series 2014A GO refunding bonds with a TIC of 1.8035%.
Since 1995, the Tar Heel state has sold approximately $15.5 billion of GOs. The largest issuance occurred in 2003 and 2004 when $1.69 billion and $2.6 billion were sold, respectively. Only $85 million of bonds were issued in 1995 and no bonds were sold in 1996.
On Tuesday, the New York State Dormitory Authority came to market with the first of three separate negotiated deals totaling more than $1 billion. Goldman, Sachs priced DASNY's $124.26 million of Series 2015A revenue bonds for The New School. The bonds are rated A3 by Moody's and A-minus by S&P.
Also slated for this week are DANSY's $690.49 million of Series 2015A revenue bonds and $265.97 million of Series 2015B taxable revenue bonds for New York University to be priced by Morgan Stanley on Thursday. The NYU bonds are rated Aa2 by Moody's and AA-minus by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $561.6 million to $11.125 billion on Wednesday. The total is comprised of $4.176 billion competitive sales and $6.948 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,236 trades on Tuesday on volume of $8.009 billion.
Most active, based on the number of trades, was the Boise-Kunda Irrigation Distrist, Idaho's Arrowrock Hydroelectric Project Series 2015 revenue refunding 4s of 2039, which traded 175 times at an average price of 100.574 with an average yield of 3.916%. The bonds were initially priced at 98.176 to yield 4.12%.
