Municipal bond traders are back at work on Tuesday after the long holiday weekend. Muni new issue volume is forecast at $5.46 billion for the week with several large deals on tap, led by two competitive sales from Washington state.
Secondary Market
Treasuries moved lower on Tuesday. The yield on the two-year Treasury rose to 0.87% from 0.84% on Friday, while the 10-year Treasury yield gained to 2.06% from 2.02% and the 30-year Treasury bond yield increased to 2.84% from 2.80%.
Top-rated municipal bonds finished stronger on Friday. The yield on the 10-year benchmark muni general obligation fell four basis points to 1.75% from 1.79% on Thursday, while the 30-year muni yield lost four basis points to 2.70% from 2.74%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Friday at 84.5% compared to 85.2% on Thursday, while the 30-year muni to Treasury ratio stood at 95.4% versus 94.7%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 34,285 trades on Friday on volume of $8.68 billion.
Primary Market
The week's calendar is made up of $3.13 billion of negotiated deals and $2.33 billion of competitive sales.
On Tuesday, the Florida Department of Transportation will competitively sell $173.25 million of Series 2016A turnpike revenue refunding bonds.
The bonds are rated Aa3 by Moody's Investors Service and AA-minus by Fitch Ratings.
The largest deals of the week are coming from Washington state, which will put two competitive sales totaling $673 million up for bid on Wednesday.
The Evergreen state will sell $529.36 million of Series R-2016B various purpose general obligation refunding bonds and $143.65 million of Series R-2016C motor vehicle tax GO refunding bonds.
Both series are rated Aa1 by Moody's and AA-plus by Standard & Poor's and Fitch.
Also in the competitive arena, the Board of Regents for the University of Houston will offer two deals totaling $285 million on Thursday. The Board will sell $101.15 million of Series 2016A tax-exempt consolidated revenue and refunding bonds and $183 million of Series 2016B taxable consolidated revenue and refunding bonds. The bonds are rated Aa2 by Moody's and AA by S&P.
Loop Capital Markets is expected to price the District of Columbia Water and Sewer Authority's $372.25 million of public utility subordinate lien revenue refunding bonds on Wednesday.
The bonds are scheduled to be due in 2019 and 2029-2039. The deal is rated Aa3 by Moody's, AA by S&P and AA-minus by Fitch.
Stifel is slated to price Gwinnet County School District, Ga.'s $330 million of GO sales tax bonds on Thursday. The issue is rated triple-A by Moody's and S&P.
Citigroup is scheduled to price the Triborough Bridge & Tunnel Authority, N.Y.'s $300 million of general revenue bonds on Thursday after a one-day retail order period on Wednesday. The transaction is rated Aa3 by Moody's and AA-minus by both S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $1.01 billion to $9.55 billion on Tuesday. The total is comprised of $4.32 billion competitive sales and $5.22 billion of negotiated deals.
Last Week's Most Active Sectors
Revenue bonds comprised 54.43% of new issuance in the week ended Jan. 15, down from 56.02% in the previous week, according to
Some of the most actively traded issues by type were in Illinois, South Carolina and Michigan.
In the GO bond sector, the Chicago 5s of 2038 traded 70 times. In the revenue bond sector, the South Carolina Public Service Authority 3.75s of 2048 traded 64 times. And in the taxable bond sector, the Anchor Bay School District 2.12s of 2020 traded 13 times, Markit said.
