Municipal bond traders are waiting to see more supply enter the market on Wednesday, led by the institutional pricing of a big Louisiana deal.
Secondary Market
U.S. Treasuries were narrowly mixed in morning trading. The yield on the two-year Treasury increased to 0.76% from 0.75% on Tuesday, while the 10-year Treasury yield inched up to 1.79% from 1.78% and the yield on the 30-year Treasury bond was flat from 2.59%.
Top-quality municipal bonds ended stronger on Tuesday. The yield on the 10-year benchmark muni general obligation fell one basis point to 1.59% from 1.60% on Monday, while the 30-year muni yield dropped one basis point to 2.53% from 2.54%, according to the final read of the Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 89.2% on Tuesday compared with 90.4% on Monday, while the 30-year muni to Treasury ratio stood at 97.5% versus 98.3%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 38,538 trades on Tuesday on volume of $9.22 billion.
Primary Market
JPMorgan is set to price the state of Louisiana’s $283.94 million of Series 2016B general obligation refunding bonds for institutions after a one-day retail order period on Tuesday.
The issue was priced for retail to yield from 1.56% with 3% and 5% coupons in a split 2022 maturity to 2.43% with a 5% coupon in 2029.
The deal is rated AA by Standard & Poor’s and AA-minus by Fitch Ratings.
Citigroup is set to sell the Maryland Stadium Authority’s $320 million of construction and revitalization program revenue bonds for the Baltimore City public schools on Wednesday.
The deal is rated Aa3 by Moody’s Investors Service, AA-minus by S&P and AA by Fitch.
The Stadium Authority is a state corporation that has issued tax-exempt bonds to construct stadiums, arenas and convention centers. In 2013, the state designated the agency as the bond issuing authority for the 21st Century School Buildings Plan, an effort to renovate the city's public school buildings.
The Stadium Authority is not a very frequent issuer. Since 2006, it has sold only about $226 million of bonds, with the largest offering occurring in 2011 when it held a $94.4 million sale. The agency, which has not been in the market since 2012, did not sell any debt in 2008-2010.
Bank of America Merrill Lynch is set to price Arlington County, Va.’s $176 million of Series 2016A&B GO public improvement and refunding bonds on Wednesday. The deal is rated triple-A by Moody’s S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $1.46 billion to $11.37 billion on Wednesday. The total is comprised of $4.17 billion of competitive sales and $7.20 billion of negotiated deals.
Evan Fallor contributed to this column
