The municipal bond market is set to see more new issues come to market on Tuesday, led by the institutional pricing of the state of Connecticut's $500 million of general obligation bonds.
Secondary Market
Treasury prices were lower on Tuesday as the yield on the two-year Treasury note rose to 0.62% from 0.60% on Monday, while the 10-year yield climbed to 2.31% from 2.24% and the 30-year yield jumped to 3.07% from 3.01%.
On Monday, the yield on the 10-year benchmark muni general obligation increased four basis points to 2.22% from 2.18% on Friday, while the yield on the 30-year GO rose by five basis points to 3.18% from 3.13%, 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 97.8% versus 101.7% on Friday, while the 30-year muni to Treasury ratio stood at 104.8% compared to 108.0%, according to MMD.
Primary Market
Siebert Brandford Shank is scheduled to price Connecticut's $500 million of Series 2015B general obligation bonds for institutions. A retail order period was held on Monday.
The GOs were priced for retail to yield from 1.11% with 2% and 4% coupons in a split 2018 maturity to 3.74% with a 4% coupon in 2035. The 2016 and 2017 maturities were offered as sealed bids.
The bonds are rated Aa3 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings. Moody's has a stable outlook on the bonds while S&P and Fitch assign negative outlooks.
The Constitution State will be back in the market next week, with $480 million of Series 2015C SIFMA-indexed bonds, giving the state total issuance of $980 million in a two-week span.
On Tuesday, Goldman is slated to price Austin, Texas' $404 million of electric utility system revenue refunding bonds. The issue is expected to consist of $323 million of tax-exempts and $81 million of taxable. The bonds are rated A1 by Moody's and AA-minus by S&P and Fitch.
Also on Tuesday, Frost Bank is set to price the San Antonio Independent School District, Texas' $307.44 million of Series 2015 unlimited tax school building and refunding bonds. The bonds, which are backed by the Permanent School Fund guarantee program, are rated triple-A by Moody's and Fitch.
Meanwhile, the biggest deal of the week is the Salt River Project Agricultural Improvement and Power District, Ariz.'s $833 million of electric system revenue bonds, scheduled to be priced by Goldman, Sachs on Wednesday. The issue is rated Aa1 by Moody's and AA by S&P.
The Las Vegas Valley Water District, Nev., is set to come to market with $388.12 million of Series 2015 A, B and C limited tax GO refunding bonds. JPMorgan is slated to price the bonds on Wednesday. The issue is rated Aa1 by Moody's and AA-plus by S&P.
The Pennsylvania Turnpike Commission's $495.56 million of Series 2015A turnpike revenue bonds are set to be priced by Loop Capital Markets on Thursday. The issue is expected to consist of $379.92 million fix-rated Series A-1 bonds and $115.64 million of Series A-2 SIFMA floating-rate notes. The issue is rated A1 by Moody's and A-plus by S&P and Fitch.
In the competitive arena, the Santa Clara Unified School District, Calif., is selling two separate offerings totaling $243.45 million on Thursday. The issues are comprised of $140.7 million of Series 2015 election of 2014 GO refunding bonds and $102.75 million of Series 2015 GO refunding bonds. Both sales are rated AA by S&P.
Also on Thursday, Milwaukee will sell a $166.11 million single issue consisting of $137.54 million Series 1015 N2 GO promissory notes and $28.57 million of Series 2015 B3 GO corporate purpose bonds. The issue is rated AA by Fitch. Milwaukee will also sell a separate issue of $125 million Series 2015 R1 revenue anticipation notes. The RANs are rated F1-plus by Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $463.6 million to $14.781 billion on Tuesday. The total is comprised of $4.687 billion competitive sales and $10.093 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 38,204 trades on Monday on volume of $7.796 billion.
The most active bond, based on the number of trades, was the New Mexico hospital equipment loan council hospital system revenue bonds for Presbyterian Healthcare Services, series 2015A 4.125s of 2044, which traded 274 times at an average price of 100.402 with an average yield of 4.064%. The bonds were initially priced at 97.587 to yield 4.27%.
