Municipal bond traders are waiting for more new deals come to market on Wednesday as issuers eye yields, which are moving up slightly from their recent record low levels.
Secondary Market
U.S. Treasuries were narrowly mixed on Wednesday. The yield on the two-year Treasury rose to 0.62% from 0.61% on Tuesday, while the 10-year Treasury yield gained to 1.47% from 1.46% and the yield on the 30-year Treasury bond decreased to 2.26% from 2.28%.
Top-rated municipal bonds finished weaker on Tuesday. The yield on 10-year benchmark muni general obligation rose four basis points to 1.33% from 1.29% on Monday, while the 30-year muni yield increased two basis points to 2.02% from 2.00%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 91.1% on Tuesday compared to 88.5% on Monday, while the 30-year muni to Treasury ratio stood at 88.8% versus 87.6%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 36,635 trades on Tuesday on volume of $10.21 billion.
Primary Market
This week, the commonwealth of Massachusetts is selling three separate negotiated deals, totaling roughly $891 million.
On Tuesday, BAML priced the state's $521.92 million of Series 2016B GO refunding bonds for retail investors, ahead of institutional pricing on Wednesday.
The bonds were priced for retail to yield from 1.08% with a 5% coupon in 2022 to 2.66% with a 3% coupon in 2038. The 2017 and 2018 maturities were offered as sealed bids.
BAML also priced the state's $250 million of GO consolidated loan of 2016 Series F taxable GO green bonds. The taxables were priced at par to yield 3.277% in 2046.
Additionally, Barclays Capital is scheduled to price Massachusetts' $200 million of GO consolidated loan of 2014 Series D multi-modal bonds and Subseries D-1 bonds on Wednesday.
All three deals carry ratings of Aa1 by Moody's Investors Service and AA-plus by S&P Global Ratings and Fitch Ratings.
Barclays is also set to price the South Carolina Public Service Authority's $750 million of Series 2016B tax-exempt and Series 2016C tax-exempt refunding and Series 2016D taxable revenue obligations.
The deal is rated A1 by Moody's, AA-minus by S&P and A-plus by Fitch.
Since 2006, Santee Cooper has issued about $10.7 billion of debt, with the largest issuance occurring in 2013 when it sold $1.89 billion of securities. It has issued over $1 billion every year since 2013. The lowest year of issuance was in 2007, when it issued just $440.5 million.
JPMorgan Securities is expected to price the New Jersey Educational Facilities Authority's $215 million of Series 2016A revenue and refunding bonds for Stockton University. The deal is rated Baa1 by Moody's and A by Fitch.
JPMorgan is also set to price Utah County, Utah's $185 million of Series 2016B hospital revenue bonds for IHC Health Services. The deal is rated Aa1 by Moody's and AA-plus by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $2.23 billion to $7.89 billion on Wednesday. The total is comprised of $2.86 billion of competitive sales and $5.02 billion of negotiated deals.
