The first of the week's new issue deals are slated to hit the market on Wednesday, ahead of the bulk of the municipal bond supply destined for sale on Thursday.
Secondary Market
U.S. Treasuries were weaker on Wednesday. The yield on the two-year Treasury rose to 0.87% from 0.86% on Tuesday, the 10-year Treasury yield gained to 1.79% from 1.76% and the yield on the 30-year Treasury bond increased to 2.52% from 2.50%.
Top-rated municipal bonds were weaker Tuesday. The yield on the 10-year benchmark muni general obligation rose three basis points to 1.67% from 1.64% on Friday, while the yield on the 30-year increased five basis points to 2.50% from 2.45%, according to the final read of Municipal Market Data's triple-A scale.
On Tuesday, the 10-year muni to Treasury ratio was calculated at 94.9% compared to 94.7% on Friday, while the 30-year muni to Treasury ratio stood at 100.0% versus 99.3%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 41,043 trades on Tuesday on volume of $8.48 billion.
Primary Market
On Wednesday, Raymond James & Associates is expected to price the Cypress-Fairbanks Independent School District, Texas' $426.76 million of Series 2016 unlimited tax school building and refunding bonds.
The deal is backed by the Permanent School Fund guarantee program and rated triple-A by Moody's Investors Service and S&P Global Ratings.
Also on Wednesday, Bank of America Merrill Lynch is slated to price the Charlotte-Mecklenburg Hospital Authority, N.C.'s $381.27 million of Series 2016A healthcare revenue refunding bonds for the Carolinas Healthcare System.
The deal is rated Aa3 by Moody's and AA-minus by S&P.
Since 2007, the authority has issued roughly $2.49 billion of bonds with the most issuance occurring in 2007 when it sold $1.1 billion of debt. The authority did not issue any bonds in 2010, 2014 or 2015. Wednesday's sale is the first one this year and brings the authority to the second highest issuance year since 2007.
In the competitive arena on Wednesday, the Campbell County Sanitation District No. 1, Ky., is selling $138.02 million of Series 2016 sanitation district revenue refunding bonds.
The deal is rated Aa3 by Moody's and AA by S&P.
On Thursday, Bank of America Merrill Lynch is slated to price the state of Illinois' $1.35 billion of Series of October 2016 general obligation refunding bonds.
The deal is rated Baa2 by Moody's, triple-B by S&P and BBB-plus by Fitch Ratings.
Also on Thursday, Citigroup is set to price the Great Lakes Water Authority, Mich.'s $1.32 billion deal consisting of $899 million of Series 2016 A, B, C & D water supply system senior lien and second lien revenue and revenue refunding bonds and $416 million of Series 2016 B & C sewage disposal system senior lien and second lien revenue refunding bonds.
Ahead of the sale, Moody's upgraded the senior liens to A3 from Baa1 and the second liens to Baa1 from Baa2 while Fitch upgraded the senior liens to A from BBB and the second lien to A-minus from BBB-minus. S&P affirmed its A-minus rating on the senior lien bonds and the BBB-plus rating on the second lien bonds.
JPMorgan Securities is expected to price the Maricopa County Industrial Development Authority, Ariz.'s $766.14 million revenue bonds for Banner Health on Thursday.
The deal is rated AA-minus by S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1 billion to $18.36 billion on Wednesday. The total is comprised of $5.90 billion of competitive sales and $12.46 billion of negotiated deals.
