Municipal bond traders on Tuesday are returning to their desks and facing a substantially smaller slate of new issues scheduled to hit the market in this holiday-shortened week.
Secondary Market
Treasuries were narrowly mixed on Tuesday. The yield on the two-year Treasury was flat from 0.70% on Friday, while the 10-year Treasury yield increased to 1.76% from 1.75% and the 30-year Treasury bond yield rose to 2.63% from 2.60%.
Top quality municipal bonds finished weaker on Friday. The yield on the 10-year benchmark muni general obligation rose four basis points to 1.60% from 1.56% on Thursday, while the 30-year muni yield gained five basis points to 2.68% from 2.63%, 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 91.7% compared to 95.0% on Thursday, while the 30-year muni to Treasury ratio stood at 103.0% versus 105.2%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 28,042 trades on Friday on volume of $7.62 billion.
Last Week's Most Active Sectors
Revenue bonds comprised 52.41% of new issuance in the week ended Feb. 12, down from 53.24% in the previous week, according to Markit.
General obligation bonds comprised 40.27% of total issuance, up from 39.91%, while taxable bonds made up 7.32%, up from 6.85%.
Some of the most actively traded issues by type in the week ended Feb. 12 were in Puerto Rico, New York and California,
In the GO bond sector, the Puerto Rico Commonwealth 8s of 2035 traded 30 times. In the revenue bond sector, the New York City Transitional Finance Authority 4s of 2041 traded 110 times. And in the taxable bond sector, the state of California 7.6s of 2040 traded 14 times.
Primary Market
About $5.2 billion of new supply is set for sale this week. And one again, a New York issuer tops the calendar.
Ramirez & Co. is set to price the New York Metropolitan Transportation Authority's $500 million of revenue green bonds which are climate bond certified. A retail order period is slated for Wednesday with the institutional pricing set for Thursday.
The deal is rated A1 by Moody's Investors Service, AA-minus by Standard and Poor's, A by Fitch Ratings and AA-plus by Kroll Bond Rating Agency.
Bank of America Merrill Lynch is expected to price the Florida Municipal Power Agency's $425 million of All-Requirements Power Supply projects refunding revenue bonds on Wednesday. The deal is rated A2 by Moody's and A-plus by Fitch.
The largest competitive sale of the week will come from the Silver State, as Nevada is set to sell $290.79 million of highway revenue motor vehicle fuel tax improvement and refunding bonds on Wednesday.
The bonds received Aa2, AA-plus and AAA ratings from Moody's, Fitch and S&P, respectively. All three rating agencies gave stable outlooks and affirmed similar ratings on the state's $441 million in outstanding state highway revenue bonds.
The Series 2016 bonds will fund highway improvements and refund outstanding parity debt. Roughly $200 million of bond proceeds will fund the $900 million Project NEON, which will increase capacity of a section of I-15 in Las Vegas and is expected to be completed in 2020.
The Los Angeles County MTA will be selling $188.27 million of Proposition A first tier senior sales tax revenue refunding bonds via a competitive sale on Thursday. The deal is rated Aa1 by Moody's and triple-A by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $1.38 billion to $7.93 billion on Tuesday. The total is comprised of $2.75 billion of competitive sales and $5.17 billion of negotiated deals.
