Municipal bond traders are getting ready for another week of hefty new issuance. Ipreo estimates muni volume at $15.39 billion, consisting of $10.92 billion of negotiated deals and $4.47 billion of competitive sales.
U.S. Treasuries were stronger on Monday morning. The yield on the two-year Treasury slipped to 0.82% from 0.83% on Friday, the 10-year Treasury yield fell to 1.77% from 1.79% and the yield on the 30-year Treasury bond decreased to 2.53% from 2.56%.
Top shelf municipal bonds closed weaker on Friday. The yield on the 10-year benchmark muni general obligation rose one basis point to 1.71% from 1.70% on Thursday, while the yield on the 30-year increased three basis points to 2.56% from 2.53%, according to the final read of Municipal Market Data's triple-A scale.
On Friday, the 10-year muni to Treasury ratio was calculated at 95.6% compared to 97.8% on Thursday, while the 30-year muni to Treasury ratio stood at 100.2% versus 102.2%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 34,205 trades on Friday on volume of $13.686 billion.
Prior Week's Actively Traded Issues
Revenue bonds comprised 57.85% of new issuance in the week ended Oct. 12, up from 57.47% in the previous week, according to Markit. General obligation bonds comprised 36.63% of total issuance, down from 36.79%, while taxable bonds made up 5.52%, down from 5.74%.
Some of the most actively traded issues by type were from Puerto Rico, Massachusetts and Illinois. In the GO bond sector, the Puerto Rico Commonwealth 8s of 2035 were traded 16 times. In the revenue bond sector, the Massachusetts Development Finance Agency 4s of 2036 were traded 38 times. And in the taxable bond sector, the Illinois 5.1s of 2033 were traded 18 times.
While there are no deals larger than $100 million scheduled to hit screens for institutions on Monday, Wells Fargo is expected to price the State of Connecticut's $650 million of general obligation bonds and green bonds for retail investors on Monday, ahead of institutional pricing on Tuesday. The deal is rated Aa3 by Moody's and AA-minus by both S&P Global Ratings and Fitch Ratings.
Jefferies is expected to price the New York Metropolitan Transportation Authority's $627.085 million of revenue refunding bonds also for retail investors on Monday, ahead of institutional pricing on Tuesday. The deal is rated A1 by Moody's, AA-minus by S&P, A by Fitch and AA-plus by Kroll Bond Rating Agency.
With such a robust calendar, everyday will feature lots of action and it all gets started on Tuesday. Other than the Connecticut sale, Wells is also scheduled to price the Texas Transportation Commission's $600 million of highway improvement GO bonds. The deal is rated triple-A by Moody's, S&P and Fitch.
Morgan Stanley is on the docket to run the books on the Commonwealth Financing Authority, Pa.'s $758.81 million of federally taxable revenue bonds.
In the competitive arena California, which has sold the most out of all issuers with $7.27 billion as of the end of the third quarter this year, will be adding to that total with three separate sales on Tuesday that will total $1.65 billion of various purpose GO and GO refunding bonds.
The largest sale will consist of $815 million and $575.755 million issued of tax-exempt bonds and $255 million of taxables. The deals are rated Aa3 by Moody's, AA-minus by S&P and Fitch Ratings.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $818.8 million to $20.29 billion on Monday. The total is comprised of $6.77 billion of competitive sales and $13.52 billion of negotiated deals.