The municipal bond market is gearing up for about $7.3 billion of new supply this week, with $2.51 of that coming from two issuers.
Treasuries were weaker on Monday morning. The yield on the two-year Treasury rose to 1.36% from 1.35% on Friday, the 10-year Treasury yield gained to 2.27% from 2.26% and the yield on the 30-year Treasury bond increased to 2.85% from 2.84%.
Top-shelf municipal bonds finished weaker on Friday after the release of a stronger-than-expected jobs report for July. The yield on the 10-year benchmark muni general obligation rose one basis point to 1.93% from 1.92% on Thursday while the 30-year GO yield increased one basis point to 2.72% 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 at 85.1% on Friday, compared with 86.1% on Thursday, while the 30-year muni to Treasury ratio stood at 95.6% versus 96.5%, according to MMD.
Prior week's actively traded issues
Revenue bonds comprised 55.91% of new issuance in the week ended Aug. 4, up from 54.88% in the previous week, according to Markit. General obligation bonds comprised 37.36% of total issuance, down from 38.42%, while taxable bonds made up 6.73%, up from 6.70%.
Some of the most actively traded bonds by type in the week ended Aug. 4 were from Massachusetts, California and Illinois issuers.
In the GO bond sector, the Massachusetts 2s of 2018 were traded 49 times. In the revenue bond sector, the Bay Area Toll Authority of Calif. 3.25s of 2036 were traded 104 times. And in the taxable bond sector, the Illinois 5.1s of 2033 were traded 24 times.
Ipreo estimates volume will crawl up to $7.32 billion, from the revised total of $7.02 billion sold in the past week, according to updated figures from Thomson Reuters. The calendar for the week ahead is composed of $4.77 billion of negotiated deals and $2.55 billion of competitive sales.
There is one retail pricing slated to take place on Monday, as JPMorgan is expected to price the Cleveland Clinic Health System’s $1 billion of obligated group State of Ohio hospital refunding revenue bonds for retail investors, ahead of institutional pricing on Tuesday. It is anticipated that the deal will feature $840 million of tax-exempts and $160 million of taxables. The deal is rated Aa2 by Moody’s Investors Service and AA by S&P Global Ratings. S&P raised the system’s rating to AA from AA-minus recently, as a result of expansion plans the system has in its U.S. and international operations.
The action will really get going on Tuesday, in what will be the busiest day of the week.
The New York City Transitional Finance Authority is scheduled to competitively sell $1.35 billion of Fiscal 2018 Series A future tax secured tax-exempt and taxable subordinate bonds on Tuesday. The separate bond sales consist of: $180.915 million of Subseries A-1 tax-exempts; $407.205 million of Subseries A-2 tax-exempts; $411.88 million of Subseries A-3 tax-exempts; $124.055 million of Subseries A-4 taxables; and $225.945 million of Subseries A-5 taxables. The TFA also intends to reoffer about $162 million of Fiscal 2018 Series 1 fixed-rate tax-exempts via competitive bid to convert existing floating-rate bonds into fixed-rates.
Morgan Stanley is scheduled to price Philadelphia’s $278.235 million of gas works revenue bonds on Tuesday. The deal is rated A3 by Moody’s, A by S&P and BB-plus by Fitch.
Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar increased $1.028 billion to $11.37 billion on Monday. The total is comprised of $6.01 billion of competitive sales and $5.36 billion of negotiated deals.