Municipal bond traders on Tuesday were set to take on the first of the week’s new big issues as the New York City Transitional Finance Authority readies $1 billion of new sales.
Secondary Market
Treasury prices were higher, with the yield on the two-year Treasury note dropping to 0.69% from 0.71% on Monday, while the 10-year yield declined to 2.15% from 2.20% and the 30-year yield decreased to 2.96% from 3.03%.
The yield on the 10-year benchmark muni general obligation finished one basis point stronger at 2.15% from 2.14% on Friday, while the yield on the 30-year GO was steady from 3.13%, 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 97.1% versus 100.6% on Friday, while the 30-year muni to Treasury ratio stood at 103.2% compared to 106.9%, according to MMD.
Primary Market
The NYC TFA is selling a total of $1 billion in the negotiated and competitive sectors on Tuesday.
Goldman Sachs is expected to price the TFA’s $750 million of future tax secured tax-exempt subordinate bonds for institutions after holding a two-day retail order period.
On Monday, the issue was repriced for retail to yield from 0.89% with a 3% coupon in 2018 to 3.74% with a 3.625% coupon in 2039; a 2017 maturity was offered as a sealed bid while no retail orders were taken in the 2029, 2032-2034, and 2036-2037 maturities. On Friday, the issue was priced for retail to yield from 0.92% with a 3% coupon in 2018 to 3.82% with a 3.75% coupon in 2039; a 2017 maturity was offered as a sealed bid while no retail orders were taken in the 2028-2029, 2031-2034, and 2036-2038 maturities.
In the competitive arena, the TFA will sell $250 million of future tax secured taxable subordinate bonds in two separate sales on Tuesday. The sales consist of $190 million of Fiscal 2016 Series A Subseries A2 taxables and $60 million of Fiscal 2016 Series A Subseries A3 taxables.
All the TFA issues are rated Aa1 by Moody’s Investors Service and triple-A by Standard & Poor’s and Fitch Ratings.
In the short-term competitive sector, the state of Massachusetts is selling three separate note deals totaling $1.2 billion on Tuesday.
The deals consist of $400 million of Series 2015A general obligation revenue anticipation notes, $400 million of Series 2015B GO RANs, and $400 million of Series 2015C GO RANs.
The RANs are rated MIG1 by Moody’s, SP1-plus by S&P and F1-plus by Fitch.
Including these issues, Massachusetts has sold about $12.8 billion of notes since 1995, with the largest issuance coming in 2014 when it sold $1.275 billion. The Bay State sold no notes at all in 1997-98 or in 2005-06.
Citigroup is scheduled to price Wayne County Airport Authority, Mich.'s $588 million of new money and refunding bonds on Tuesday.
The airport's senior lien bonds are rated A2 by Moody’s, A by S&P and A-minus by Fitch. All three agencies maintain a stable outlook on the credit.
Wells Fargo Securities is expected to price the San Francisco Bay Area Transit District’s $358.56 million offering, which consists of $187.63 million of sales tax refunding bonds, rated AA-plus by S&P and Fitch, pricing on Tuesday with $170.93 million of general obligation refunding bonds, rated triple-A by Moody’s and S&P, pricing on Thursday.
Goldman is slated to price the Sacramento Public Financing Authority’s $274 million of Series 2015 taxable lease revenue bonds for the Golden 1 Center on Wednesday. The bonds are rated A-plus by S&P and A by Fitch.
Barclays Capital is expected to price Toledo Hospital’s $270 million of Series 2015A taxable corporate CUSIP bonds for the ProMedica Healthcare Obligated group on Thursday. The issue is rated Aa3 by Moody’s and AA by S&P.
Morgan Stanley is set to price the state of Mississippi’s $200 million of Series 2015E gaming tax revenue bonds on Wednesday. The issue is rated A3 by Moody’s and A-plus by S&P and Fitch.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 33,739 trades on Monday on volume of $5.210 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $2.03 billion to $8.77 billion on Tuesday. The total is comprised of $2.90 billion competitive sales and $5.87 billion of negotiated deals.
