Bond yields at a glance

MBIS benchmark (~AA)

MBIS AAA

MMD AAA

U.S. Treasuries

10 year

2.581

2.476

2.34 (+0-1 bps)

2.73

30 year

3.027

2.915

2.87 (-0-1 bps)

2.97

MBIS indices are updated hourly on the Bond Buyer Data Workstation.

Municipal bond market participants are weighing in on President Trump's infrastructure comments in his State of the Union address.

The president on Tuesday night called for Congress to produce a bill that generates at least $1.5 trillion for new infrastructure investment, but he provided no details on how to fund it.

Some members of the buyside community feel the infrastructure plan may be too much for lawmakers, municipalities, and investors to swallow after barely having time to digest the latest tax amendments that kicked off the New Year.

"Given the recent passage of tax reform, we sense that members of both political parties may be concerned with potentially adding to the federal deficit," Michael Pietronico, chief executive officer at Miller Tabak Asset Management, said in an interview on Wednesday.

"While the case can be made for states to work alongside the federal government on this initiative, we remain of the mindset that outsized pension obligations are handcuffing lawmakers at the local level," he explained. "It is for this reason we sense infrastructure spending may become more of a 2019 possibility after the results of the midterm elections."

The market will now be waiting for any further word from the White House on what form the financing and funding for this huge program could take.

Primary market
Morgan Stanley priced Kansas City, Mo.’s $165 million of Series 2018A sanitary sewer system improvement revenue bonds.

The issue was priced to yield from 1.83% with a 4% coupon in 2021 to 3.51% with a 4% coupon in 2035; a 2042 maturity was priced as 4s to yield 3,55%. A 2019 maturity was offered as a sealed bid.

The deal is rated Aa2 by Moody’s Investors Service and AA by S&P Global Ratings.

Since 2008, Kansas City, Mo., has sold about $2.99 billion of bonds, with the most issuance occurring in 2016 when it sold $517 million and the least amount in 2010 when it sold $81 million.

RBC Capital Markets is expected to price the Mesa County Valley School District No. 51, Colo.’s $118.5 million of Series 2018 general obligation bonds.

The deal is insured by the Colorado state intercept program and rated Aa2 by Moody’s and AA-minus by S&P.

There are no competitive sales of $100 million or above slated for the week.

On Tuesday, JPMorgan Securities priced the Arizona Board of Regents $108 million of system revenue bonds.

The deal is rated Aa2 by Moody’s and AA-minus by S&P.

Bank of America Merrill Lynch priced the Upper Arlington City School District, Ohio’s $230 million of Series 2018A school facilities construction and improvement GOs.

The deal is rated Aa1 by Moody’s and AAA by S&P.

Bond Buyer 30-day visible supply at $5.07B
The Bond Buyer's 30-day visible supply calendar decreased $2.06 billion to $5.07 billion on Wednesday. The total is comprised of $1.37 billion of competitive sales and $3.69 billion of negotiated deals.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 45,113 trades on Tuesday on volume of $10.87 billion.

California, New York and Texas were the three states with the most trades on Tuesday, with the Golden State taking 15.119% of the market, the Empire State taking 11.668% and the Lone Star State taking 11.056%.

— Aaron Weitzman

Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation. Click here for a brief tour of the Workstation, or contact Vanessa Kim at 212-803-8474 for more information.

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Chip Barnett

Chip Barnett

Chip Barnett is a journalist with more than 40 years of experience. Barnett is currently Senior Market Reporter for The Bond Buyer.