The municipal bond market is ready to absorb the first of the week's larger new issues, with deals expected to be priced both for retail and institutions on Tuesday.
The Port Authority of New York and New Jersey and the New York City Transitional Finance Authority will be priced for retail and the Michigan Finance Authority will be pricing hospital revenue and refunding bonds for the Sparrow Obligated Group for institutions.
Secondary Market
Treasury prices were higher on Tuesday morning as the yield on the two-year Treasury note fell to 0.51% from 0.54% on Monday, while the 10-year yield dropped to 1.86% from 1.94% and the 30-year yield decreased to 2.53% from 2.58%.
Prices of top-quality munis closed flat for a second straight session on Monday. The yield on the 10-year benchmark muni general obligation was unchanged from Friday's 1.97%, while the yield on the 30-year GO was also the same at 2.84%, according to the final read of Municipal Market Data's triple-A scale.
On Monday, The 10-year muni to Treasury ratio was calculated at 101.8% versus 101.2% on Friday, while the 30-year muni to Treasury ratio stood at 110.0% compared to 110.2%.
Primary Market
The Port Authority of New York and New Jersey is scheduled to come to market with $775 million of consolidated bonds on Wednesday after a one-day retail order period on Tuesday. The deal is structured to consist of 188th Series alternative minimum tax (AMT) bonds and 189th Series non-AMT bonds. The issue is rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings.
Loop Capital Markets LLC is scheduled to price the New York City Transitional Finance Authority's $650 million of future tax secured subordinate bonds, Fiscal 2015 Subseries E-1 on Thursday after a two-day order period starting on Tuesday. The deal is currently structured as serials running from 2017 to 2035 with term bonds in 2040 and 2042. The bonds are rated Aa1 by Moody's and triple-A by S&P and Fitch.
RBC is expected to price the Michigan Finance Authority's $214.195 million of hospital revenue and refunding bonds for the Sparrow Obligated Group. The deal is rated A1 by Moody's and A-plus by S&P.
Citigroup is expected to price Fort Bend County, Texas's $143 million of unlimited tax road and refunding and limited tax refunding bonds. The bonds are expected to mature serially from 2016-2045 and is rated Aa1 by Moody's.
RBC is also scheduled to price the city of Cleveland's $128.500 million of water revenue bonds, Series 2015 on Tuesday. The deal is rated Aa1 by Moody's and AA-plus by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.449 billion to $13.260 billion on Tuesday. The total is comprised of $4.248 billion competitive sales and $9.012 billion of negotiated deals.
