The municipal bond market will see the first of the week's $8.84 billion of bond supply price on Tuesday, led by a Golden State issuer.
Secondary Market
U.S. Treasuries were narrowly mixed on Tuesday. The yield on the two-year Treasury rose to 0.75% from 0.74% on Monday, the 10-year Treasury yield was unchanged from 1.54% and the yield on the 30-year Treasury bond was flat at 2.23%.
Top-rated municipal bonds finished mixed on Monday. The yield on the 10-year benchmark muni general obligation was unchanged from 1.40% on Friday, while the yield on the 30-year muni decreased one basis point to 2.11% from 2.12%, according to the final read of Municipal Market Data's triple-A scale.
On Monday, the 10-year muni to Treasury ratio was calculated at 91.1% compared to 88.7% on Friday, while the 30-year muni to Treasury ratio stood at 94.4% versus 92.7%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 30,517 trades on Monday on volume of $8.11 billion.
Primary Market
Bank of America Merrill Lynch is set to price the California Health Facilities Financing Authority's $498 million of revenue bonds for Providence St. Joseph Health on Tuesday.
The deal is rated AA-minus by S&P Global Ratings and Fitch Ratings.
On Thursday, Ziegler is expected to price the California HFFA's $271 million of refunding revenue bonds for the Adventist Health System/West. The deal is rated A by Fitch.
Since 2006, the HFFA has sold about $17 billion of debt with the largest issuance occurring in 2009 when it sold about $2.33 billion of bonds. The authority sold the least amount of debt in 2014 when it issued nearly $500 million of bonds.
On Tuesday, Goldman Sachs is expected to price the Waterworks Board of Birmingham, Ala.'s $424 million of Series 2016A, B and C water revenue refunding bonds, broken into three series of tax-exempts and taxables. The deal is rated Aa3 by Moody's Investors Service and AA-minus by S&P.
Citigroup is set to price the Judson Independent School District, Texas' $329 million of unlimited tax school building and refunding bonds on Tuesday. The deal is rated triple-A by Moody's, S&P and Fitch.
Goldman is expected to price the Illinois Municipal Power Agency's $250 million of Series 2016A power project revenue bonds for the Prairie State Project on Tuesday. The deal is rated A2 by Moody's and A-minus by S&P.
Piper Jaffray is set to price Phoenix, Ariz.'s $232 million of Series 2016 general obligation refunding bonds on Tuesday. The deal is rated Aa1 by Moody's and AA-plus by S&P.
Competitive sales dominate this week's calendar, packed into the two-day timeframe of Wednesday and Thursday.
Topping the competitive calendar is the state of Massachusetts, which is coming to market with over $2 billion of bonds and notes.
The Bay State will competitively sell $1.5 billion of revenue anticipation notes in three separate sales on Wednesday and about $835 million of general obligation bonds on Thursday in two separate sales.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $381.3 million to $14.11 billion on Tuesday. The total is comprised of $5.12 billion of competitive sales and $8.99 billion of negotiated deals.
Ramirez Sees '16 Gross Supply at $378B
Ramirez & Co. sees 2016 gross supply coming in at $378 billion, with negative net issuance for the year.
"Gross supply through July 2016 was $252.77 billion, while net supply was $15.44 billion," Ramirez wrote in a Monday market comment. "We see net muni market supply at -$4.59 billion over the next 30 days, a reversal of the year to date trend."
Ramirez said that of the 10 states that have the most debt outstanding, New Jersey is most likely to shrink the largest amount (-0.8%), followed by Ohio (-0.6%), and Pennsylvania (-0.5%).
On the other hand, Illinois is expected to expand the most (+0.9%), followed by Massachusetts (+0.6%), and Texas (+0.2%), Ramirez said.
