The municipal bond market will be awaiting the first part of the large Ascension Health Alliance offering, which is set to be priced on Tuesday.
Secondary Market
U.S. Treasuries were weaker on Tuesday. The yield on the two-year Treasury increased to 0.86% from 0.83% on Monday, while the 10-year Treasury yield rose to 1.91% from 1.90% and the yield on the 30-year Treasury bond gained to 2.74% from 2.72%.
Top quality municipal bonds were steady to weaker on Monday. The yield on the 10-year benchmark muni general obligation was steady from 1.65% on Friday while the 30-year muni yield increased by one basis point to 2.61% from 2.60%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 86.8% on Monday compared with 87.6% on Friday, while the 30-year muni to Treasury ratio stood at 95.8% versus 96.3%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 34,380 trades on Monday on volume of $6.83 billion.
Primary Market
New issue action is set to get underway on Tuesday when Morgan Stanley prices Ascension’s $1.1 billion healthcare deal.
The fixed-rate part of the sale is slated to sell through the Wisconsin Health & Educational Facilities Authority, the Alabama Special Care Facilities Authority of Birmingham, the Alabama Special Care Facilities Authority of Mobile, and the Michigan Finance Authority.
The system is also selling $250 million of taxable bonds as soon as Tuesday. The overall deal includes $575 million of variable-rate issuance, which will be sold by the Wisconsin and Michigan authorities, some on Tuesday and some the following week.
Ahead of the sale, Moody's Investors Service affirmed the system's Aa2 rating and Standard & Poor’s and Fitch Ratings affirmed their AA-plus ratings on the system's post-issuance debt load of $6.8 billion.
Also on Tuesday, Bank of America Merrill Lynch is set to price the California Statewide Communities Development Authority’s $883 million of Series 2016A revenue bonds for the Loma Linda University Medical Center. The deal is rated BB by S&P and BB-plus by Fitch.
Roosevelt & Cross is expected to price the Hudson County Improvement Authority, N.J.’s $160 million of Series 2016C current interest and capital appreciation bonds.
Piper Jaffray is set to price Ohlone Community College District, Calif.’s $155 million of GOs.
In the competitive arena, Miami-Dade County, Fla., will sell $350 million of Series 2016A general obligation refunding bonds under the Better Communities Program.
The sale, which was postponed from the previous week, is rated Aa2 by Moody’s and AA by S&P.
Since 2006, the county has sold about $15 billion of debt, with the most issuance occurring in 2010 when it sold $2.39 billion of bonds. The county sold the least amount of debt in 2006 when it issued $214.4 million of bonds.
Also, the Illinois Regional Transportation Authority will competitively sell $150 million of Series 2016C taxable GO working cash notes. The deal is rated AA by Fitch.
And the Horry County School District, S.C. will competitively sell $125 million of Series 2016 GOs on Tuesday. The bonds are rated Aa1 by Moody’s and AA by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $801.6 million to $13.17 billion on Tuesday. The total is comprised of $4.95 billion of competitive sales and $8.22 billion of negotiated deals.
Yvette Shields contributed to this report
