Municipal bond traders are waiting to see the San Diego Public Facilities Financing Authority's big sale hit the screens on Wednesday as they keep an eye on rising bond yields.
Secondary Market
U.S. Treasuries were weaker on Wednesday. The yield on the two-year Treasury rose to 0.93% from 0.90% on Tuesday, while the 10-year Treasury yield gained to 1.87% from 1.83% and the yield on the 30-year Treasury bond increased to 2.66% from 2.64%.
Top-shelf municipal bonds finished weaker on Tuesday. The yield on the 10-year benchmark muni general obligation rose two basis points to 1.65% from 1.63% on Monday while the 30-year muni yield increased two basis points to 2.45% from 2.43%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 88.8% on Tuesday compared to 88.7% on Monday, while the 30-year muni to Treasury ratio stood at 92.7% versus 92.5%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,105 trades on Tuesday on volume of $9.67 billion.
Primary Market
On Wednesday, the biggest deal of the day will be coming from the San Diego Public Facilities Financing Authority.
JPMorgan Securities is expected to price the $567.96 million of Series 2016A and 2016B subordinated water revenue bonds. The deal is rated Aa3 by Moody's Investors Service and AA-minus by Fitch Ratings.
Barclays Capital is set to price the city of Chicago's $348.32 million of Series 2016A AMT and Series 2016B Non-AMT second lien revenue and revenue refunding bonds for Midway Airport. The bonds are rated A by S&P Global Ratings, Fitch and Kroll Bond Rating Agency.
Bank of America Merrill Lynch is expected to price the Washington Metropolitan Area Transit Authority, D.C.'s $220 million of Series 2016A gross revenue transit bonds.
In the competitive sector on Wednesday, Fort Worth, Texas is selling $257.97 million of bonds in three separate sales.
The offerings consist of $164.55 million of Series 2016 general purpose refunding and improvement bonds, rated Aa2 by Moody's and AA-plus by S&P and Fitch; $75.89 million of Series 2016 water and sewer system revenue refunding and improvement bonds, rated Aa1 by Moody's, AA-plus by S&P and AA by Fitch; and $17.53 million of Series 2016 drainage utility system revenue refunding bonds, rated AA-plus by S&P and Fitch.
The Metropolitan Council of the Minneapolis-St. Paul Area in Minnesota is competitively selling $164 million of bonds in three separate offerings consisting of $123.13 million of Series 2016C GO wastewater and refunding bonds, $36.17 million of Series 2016A GO transit and refunding bonds and $4.7 million of Series 2016B GO park bonds.
The Santa Clara County Financing Authority, Calif., is competitively selling $160.85 million of Series 2016Q refunding lease revenue bonds for multiple facilities projects. The deal is rated AA-plus by S&P and AA by Fitch.
Since 2006, the authority has issued about $1.2 billion of bonds with the laregst issuance occurring in 2008 when it sold $382.4 million of debt. The authority did not come to market in 2011 or 2013.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $2.08 billion to $12.92 billion on Wednesday. The total is comprised of $7.47 billion of competitive sales and $5.46 billion of negotiated deals.
