Municipal bond traders are set for the first of the week’s new issue slate to come to market on Tuesday, led off by a big negotiated deal from Houston schools and a small competitive sale from the state of Michigan.
Secondary Trading
U.S. Treasuries were weaker on Tuesday. The yield on the two-year Treasury dipped to 0.85% from 0.86% on Monday, while the 10-year Treasury yield slipped to 1.85% from 1.86% and the 30-year Treasury bond yield dropped to 2.62% from 2.66%.
Top quality municipal bonds finished unchanged in quiet activity on Monday. The yield on the 10-year benchmark muni general obligation was steady from 1.82% on Thursday, while the 30-year muni yield was flat at 2.76%, 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 97.4% compared with 96.3% on Thursday, while the 30-year muni to Treasury ratio stood at 104.4% versus 103.8%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,701 trades on Monday on volume of $7.78 billion.
Primary Market
JPMorgan Securities is expected to price the Houston Independent School District’s $683.6 million of Series 2016A limited tax schoolhouse and refunding bonds on Tuesday.
The bonds are backed by the Permanent School Fund guarantee program and are rated triple-A by Moody’s and Standard & Poor’s.
Morgan Stanley is expected to price Tampa, Fla.’s $200 million of Series 2016A health system revenue bonds for Baycare Health System on Tuesday. The bonds are rated AA by Fitch.
Since 2006, the city of Tampa has sold only about $1.7 billion of bonds, with the largest issuance occurring in 2012 when it sold $500 million of bonds. The city did not come to market at all in 2008, 2009 or 2014.
For retail investors, Barclays Capital is set to price California State University’s $1.34 billion of Series 2016 A & B revenue bonds ahead of the institutional pricing on Wednesday. The bonds are rated Aa2 by Moody’s.
In the competitive arena on Tuesday, the Central Florida Expressway Authority will be offering $154.67 million of Series 2016A senior lien refunding revenue bonds. The issue is rated A2 by Moody’s and A by S&P and Fitch.
Palm Beach County, Fla., will competitively sell $126.65 million of Series 2016 revenue refunding bonds on Tuesday. The deal is rated Aa1 by Moody’s and AA-plus by S&P and Fitch.
The Virginia Public School Authority will competitively sell $148.90 million of Series 2016 special obligation school financing and refunding bonds for Prince William County. The bonds are rated triple-A by Moody’s, S&P and Fitch.
The state of Michigan will be taking bids for its $87.2 million of Series 2016A tax-exempt general obligation environmental program bonds. The deal is rated Aa1 by Moody’s and AA-minus by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $722.4 million to $9.91 billion on Tuesday. The total is comprised of $2.84 billion of competitive sales and $7.07 billion of negotiated deals.
