Municipal bond traders were preparing for a busy Wednesday as the bulk of the week’s offerings will be priced the day ahead of the Federal Reserve’s decision on interest rates.
The Federal Open Market Committee meets Wednesday and Thursday, with its decision statement to be released on Thursday at 2 p.m., ET, followed by a press conference at 2:30 p.m., ET, by Fed Chair Janet Yellen.
Secondary Trading
Treasury prices were little changed on Wednesday, with the yield on the two-year Treasury note remaining flat from 0.79% on Tuesday, while the 10-year yield rose to 2.28% from 2.27% and the 30-year yield was unchanged from 3.06%.
The yield on the 10-year benchmark muni general obligation ended on Tuesday two basis points stronger at 2.25% from 2.23% on Monday, while the yield on the 30-year GO was four basis points stronger at 3.24% from 3.20%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Tuesday at 98.9% versus 102.3% on Monday, while the 30-year muni to Treasury ratio stood at 108.5% compared to 106.0%, according to MMD.
Primary Market
Topping the negotiated slate is the Texas Transportation Commission’s sale of $750 million Series 2015A general obligation mobility fund refunding bonds. The advance refunding, expected to be priced by JPMorgan Securities, is rated triple-A by Moody’s Investors Service, Standard & Poor’s and Fitch.
Barclays Capital is slated to price the Illinois Finance Authority’s $368 million of Series 2015A revenue bonds for OSF Healthcare. The issue is rated A2 by Moody’s and A by both S&P and Fitch.
Citigroup is set to price the Los Angeles Department of Water and Power’s $271 million of power system revenue bonds. The bonds are rated Aa3 by Moody’s and AA-minus by S&P and Fitch.
Citi is set to price the Illinois’ Metropolitan Pier and Exposition Authority’s $222 million of bonds for the McCormick Place expansion project. The issue is comprised of current interest bonds and capital appreciation bonds.
And Citi is also expected to price Philadelphia’s $225 million of GOs. The issue is rated A2 by Moody’s and A-plus by S&P and Fitch.
Since 1995, the city of Philadelphia has issued roughly $11.96 billion in bonds. The years of 2007 and 2010 saw the highest issuance, when it issued $1.35 billion and $1.36 billion, respectively. The City of Brotherly Love did not come to market at all in 1996 and 2000.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,483 trades on Tuesday on volume of $7.362 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $267.9 million to $8.95 billion on Wednesday. The total is comprised of $2.78 billion competitive sales and $6.17 billion of negotiated deals.
