The municipal bond market is set to see more supply enter the market on Tuesday, ahead of two busier days later in the week despite a meeting of the Federal Reserve.
The Federal Open Market Committee is set to begin its two-day monetary policy meeting in Washington, D.C., on Tuesday with an announcement on interest rates to be released Wednesday afternoon.
Secondary Market
U.S. Treasuries were stronger on Tuesday. The yield on the two-year Treasury dropped to 0.93% from 0.96% on Monday, while the 10-year Treasury yield declined to 1.92% from 1.96% and the 30-year Treasury bond yield decreased to 2.69% from 2.72%.
Top-rated municipal bonds finished mixed on Monday. The yield on the 10-year benchmark muni general obligation was steady from 1.89% on Friday, while the 30-year muni yield fell one basis point to 2.85% from 2.86%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Monday at 96.4% compared to 95.7% on Friday, while the 30-year muni to Treasury ratio stood at 104.3% versus 104.1%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 32,032 trades on Monday on volume of $7.02 billion.
Primary Market
This week’s calendar consists of $5.78 billion of negotiated deals and $1.49 billion of competitive sales.
The state of Hawaii will offer two separate competitive sales on Tuesday totaling $525 million.
The Aloha State will start off with $500 million of GOs and then follow it up with $25 million of taxable GOs. This will mark the first time in more than a quarter century that Hawaii will sell a competitive bond issue. Both sales are rated Aa2 by Moody’s and AA by S&P and Fitch.
Howard County, Md., will be selling three separate sales totaling $172.25 million, also on Tuesday. The largest of the three deals is a $135.97 million offering of GO consolidated public improvement project refunding bonds. All three issues are rated triple-A by Moody’s, S&P and Fitch.
Since 2006, the county has sold about $1.7 billion, with the largest issuances in 2007 and 2011 when it offered $248 million and $379 million, respectively. The county saw low years in 2006 and 2012, when it issued just $100 million and $57 million, respectively.
Bank of America Merrill Lynch is expected to price the Lancaster County, Pa., Hospital Authority’s $175 million of revenue and refunding bonds for the University of Pennsylvania Health System. The deal is rated Asa3 by Moody’s and AA by S&P.
Ramirez & Co. is also set to price Connecticut’s $550 million of general obligation bonds on Wednesday. The deal is rated Aa2 by Moody’s and AA by S&P, Fitch and Kroll Bond Rating Agency.
And the biggest deal of the week has a Thursday target date. JPMorgan Securities is set to price the Nashville and Davidson County Health and Educational Facilities, Tenn.’s $780 million of revenue bonds for the Vanderbilt University Medical Center. The bonds are rated A3 by Moody’s.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $3.47 billion to $7.18 billion on Tuesday. The total is comprised of $2.57 billion of competitive sales and $4.61 billion of negotiated deals.
