Municipal bond traders are gearing up to see a second wave of new issuance hit the market on Wednesday.
Secondary Market
U.S. Treasuries were weaker on Wednesday. The yield on the two-year Treasury rose to 0.70% from 0.69% on Tuesday as the 10-year Treasury yield gained to 1.58% from 1.55% and the yield on the 30-year Treasury bond increased to 2.30% from 2.27%.
Top quality municipal bonds finished flat on Tuesday. The yield on the 10-year benchmark muni general obligation was unchanged from 1.45% on Monday, while the yield on the 30-year muni was flat from 2.11%, 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 93.2% compared to 91.5% on Monday, while the 30-year muni to Treasury ratio stood at 92.8% versus 91.7%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 36,043 trades on Tuesday on volume of $9.44 billion.
Primary Market
The largest deal of the week is slated to sell on Wednesday as Morgan Stanley is set to price the State Building Authority of Michigan's $663.84 million of Series 2016 revenue and revenue refunding bonds.
The deal is rated Aa2 by Moody's Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings.
Since 2006, the Michigan SBA has issued about $3.7 billion of debt, with the largest issuance occurring in 2015 when it sold $989 million of securities. This sale will mark the first time the Michigan SBA has issued in back-to-back years since 2008 and 2009.
Also on Wednesday, Wells Fargo Securities is set to price the New York Metropolitan Transportation Authority's $529.61 million of Series 2016C transportation revenue bonds for institutions after holding a one day retail order period on Tuesday.
The issue was priced for retail to yield from 0.86% with a 4% coupon in 2019 to 2.50% with a 5% coupon in 2039; a 2041 maturity was priced as 4s to yield 2.76%, a 2046 maturity was priced as 5s to yield 2.56% and a 2056 maturity was priced as 5s to yield 2.79%. The 2017 and 2018 maturities were offered as sealed bids.
The deal is rated A1 by Moody's, AA-minus by S&P and A by Fitch.
Goldman Sachs is expected to price New York City Trust for Cultural Resources' $227.19 million of Series 2016-One-E revenue bonds for the Museum of Modern Art. The MoMA bonds are rated Aa2 by Moody's and AA by S&P.
Morgan Stanley is set to price the Louisiana Citizens Property Insurance Corp.'s $166.47 million of Series 2016A assessment revenue refunding bonds.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $1.50 billion to $11.95 billion on Wednesday. The total is comprised of $4.46 billion of competitive sales and $7.49 billion of negotiated deals.
