The municipal bond market is looking at a $5.42 billion new issue calendar this week, which consists of $3.82 billion of negotiated deals and $1.60 billion of competitive sales.
The Federal Open Market Committee will meet Tuesday and Wednesday, with an announcement on Wednesday that most observers expect will leave its target rate unchanged.
Secondary Market
Treasuries moved higher. The yield on the two-year Treasury slipped to 0.86% from 0.87% on Friday, while the 10-year Treasury yield fell to 2.03% from 2.05% and the 30-year Treasury bond yield decreased to 2.80% from 2.82%.
Municipal bonds ended weaker on Friday. The yield on the 10-year benchmark muni general obligation increased three basis points to 1.75% from 1.72% on Thursday, while the 30-year muni yield was up five basis points to 2.76% from 2.71%, 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 85.4% compared to 85.3% on Thursday, while the 30-year muni to Treasury ratio stood at 97.8% versus 96.9%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 34,040 trades on Friday on volume of $7.16 billion.
Last Week's Most Active Sectors
Revenue bonds comprised 54.02% of new issuance in the week ended Jan. 22, down from 54.43% in the previous week, according to
Some of the most actively traded issues by type were in Puerto Rico, Indiana and Illinois. In the GO bond sector, the Puerto Rico Commonwealth 8s of 2035 traded 30 times. In the revenue bond sector, the Indiana Finance Authority 4s of 2051 traded 83 times. And in the taxable bond sector, the Illinois state 5.1s of 2033 traded 22 times, Markit said.
Primary Market
The largest deal of the week comes from the Chicago Board of Education. JPMorgan Securities is scheduled to price the $875 million of unlimited tax general obligation bonds of dedicated revenues on Wednesday.
The issue is slated to consist of $795.52 million of Series 2016A tax-exempt GOs in three term maturities of 2035, 2040 and 2044. The $79.49 million of Series 2016B taxables are tentatively structured as a 2033 bullet.
The Chicago BOE has seen rating downgrades, state takeover talk and a cash crunch as of late. Standard & Poor's cut the CPS two notches to B-plus while Fitch Ratings chopped its rating by three notches, also to B-plus. The schools get their highest marks from Kroll Bond Ratings Agency, which gives the Board of Ed a grade of triple-B.
Fairfax County, Va., will competitively sell $371.47 million of Series 2016A public improvement and refunding bonds on Tuesday. The deal is rated triple-A by Moody's Investors Service, S&P and Fitch.
Citi has won four of the past five competitive issues that Fairfax has auctioned, having most recently won $229 million of Series 2015A bonds on Feb. 2, 2015, with a true interest cost of 2.68% on Feb. 2, 2015.
Ramirez is scheduled to price Nassau County, N.Y.'s $273 million of Series 2016A GO general improvement bonds on Tuesday, following a retail order period on Monday. The deal is rated A2 by Moody's, A-plus by S&P and A by Fitch.
S&P recently revised its outlook to negative from stable and affirmed its A-plus long-term rating on Nassau County, N.Y.'s general obligation bonds.
JPMorgan is set to price the Connecticut Health and Educational Facilities Authority's $250 million of revenue bonds for Yale University in a remarketing on Thursday. The deal is tentatively structured to consist of two series of $125 million apiece. The deal is rated triple-A by both Moody's and S&P.
Wells Fargo is slated to price the Airport Commission of the City and County of San Francisco's $239.77 million of second series revenue refunding bonds for the San Francisco International Airport on Tuesday. The deal is tentatively scheduled to mature serially from 2021 to 2032 and is rated A1 by Moody's and A-plus by S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $338.0 million to $8.18 billion on Monday. The total is comprised of $2.85 billion competitive sales and $5.33 billion of negotiated deals.
