The municipal bond market will be watching the Treasury market on Tuesday as government yields continued to slip in the wake of geopolitical worries caused by Greek and Chinese financial woes.
Treasury prices were higher in early trading, with the yield on the two-year Treasury note falling to 0.57% from 0.59% on Monday, while the 10-year yield dropped to 2.22% from 2.28% and the 30-year yield decreased to 3.02% from 3.07%.
Secondary Trading
On Monday, the yield on the 10-year benchmark muni general obligation fell six basis points to 2.26% from 2.32% last Thursday, while the yield on the 30-year GO was off six basis points to 3.27% from 3.33%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Monday at 99.0% versus 97.0% on Thursday, while the 30-year muni to Treasury ratio stood at 106.2% compared to 104.4%, according to MMD.
Primary Market
In the competitive sector on Tuesday, Tampa, Fla., is set to sell two separate issues totaling around $127 million.
The sales consist of $88.95 million of Series 2015 water and sewer systems refunding revenue bonds, rated Aa1 by Moody's and triple-A by S&P and Fitch, and $38.13 million of Series 2015 non-ad valorem refunding revenue bonds, rated Aa2 by Moody's Investors Service, AA-plus by Standard & Poor's and AA-minus by Fitch Ratings.
Also from the Sunshine State week, the Central Florida Expressway Authority is set to competitively sell $194 million of Series 2015 senior lien revenue bond anticipation notes on Wednesday. The BANs are rated A2 by Moody's and A by S&P and Fitch.
And Hillsborough County, Fla., is set to competitively sell $140 million of Series 2015 community investment tax refunding revenue bonds on Wednesday. The bonds are rated A1 by Moody's.
In the negotiated sector on Wednesday, the Illinois State Toll Highway Authority's $400 million of Series 2015A toll highway senior revenue bonds are expected to be priced by Bank of America Merrill Lynch.
The bonds are rated Aa3 by Moody's Investors Service and AA-minus by S&P and Fitch.
This deal is the first of two new-money borrowings to finance a record year of capital spending. The $1.6 billion of capital spending planned this year is part of the 15-year, $12 billion Move Illinois capital program launched in 2011. The authority operates 286 miles of toll highways in 12 counties in northern Illinois.
Since 1996, the authority has issued almost $8 billion of bonds, with the most issuance occurring in 2008 and 2014 when it sold $1.1 billion and $1.5 billion, respectively. The authority sold no debt in 1997, 1999 through 2004 or in 2011 or 20012.
Citi is set to price the Massachusetts Port Authority's $179 million of Series 2015A non-AMT and Series 2015B AMT revenue bonds on Wednesday. The bonds are rated AA by S&P. Citi is also expected to price the New York State Mortgage Agency's $152 million of homeowner mortgage revenue bonds consisting of Series 192 non-AMT, Series 193 non-AMT and Series 194 AMT bonds on Wednesday.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 38,920 trades on Monday on volume of $6.242 billion.
The most active bond, based on the number of trades, was the New York City Transitional Finance Authority's Series 2015 S-2 building and revenue bond 4s of 2044, which traded 150 times at an average price of 100.288 with an average yield of 3.948%. The bonds were initially priced at 99.625 to yield 4.022%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $948.2 million to $10.04 billion on Tuesday. The total is comprised of $3.14 billion competitive sales and $6.91 billion of negotiated deals.
