The municipal bond market is set to see the first big wave of supply hit the screens on Tuesday, just part of the over $11 billion in new issues slated for sale this week.
Secondary Market
Treasuries were little changed on Tuesday. The yield on the two-year Treasury was unchanged from 0.77% on Monday, the 10-year Treasury yield rose to 1.67% from 1.66% and the yield on the 30-year Treasury bond was flat at 2.39%.
Top-shelf municipal bonds ended weaker on Monday. The yield on the 10-year benchmark muni general obligation rose three basis points to 1.52% from 1.49% on Friday, while the yield on the 30-year rose three basis points to 2.23% from 2.20%, 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 89.2% on Friday, while the 30-year muni to Treasury ratio stood at 93.1% versus 92.0%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 30,688 trades on Monday on volume of $9.29 billion.
Primary Market
The New York City Transitional Finance Authority is scheduled to hit the market with a total of $1.05 billion in negotiated and competitive offerings this week.
On Tuesday, Ramirez & Co. is set to hold a second day of retail orders for the TFA's $800 million of tax-exempt Fiscal 2017 Series B Subseries B-1 future secured subordinate bonds. The deal will be priced for institutions on Wednesday.
On Monday, Ramirez priced the issue for retail to yield from 0.84% with 4% and 5% coupons in a spilt 2019 maturity to 3% at par in 2042. No retail orders were taken in the 2030-2034 or 2036-2039 maturities. A 2018 maturity was offered as a sealed bid.
The deal is expected to be rated Aa1 by Moody's Investors Service and rated triple-A by S&P Global Ratings and Fitch Ratings.
On Wednesday, the TFA will offer two competitive sales of taxable bonds, consisting of $62.5 million of Fiscal 2017 Series B Subseries B-3 future secured subordinate bonds and $187.51 million of Fiscal 2017 Series B Subseries B-2 future secured subordinate bonds.
On Tuesday, Citigroup is set to price the New York Convention Center Development Corp.'s $416 million of hotel unit fee secured revenue bonds consisting of Series 2016A senior liens and Series 2016B subordinated liens. The Series A bonds are rated Aa3 by Moody's while the Series B bonds are rated A2 by Moody's.
Siebert Cisneros Shank is slated to price Connecticut's $964.32 million of special tax obligation bonds and special tax obligation refunding bonds for transportation infrastructure purposes on Tuesday, following a one-day retail order period. The deal is rated Aa3 by Moody's, AA by S&P and AA-minus by Fitch.
Goldman is expected to price the Michigan Finance Authority's $820.42 million of Series 2016 hospital revenue refunding bonds for the Henry Ford Health System The deal is rated A3 by Moody's and A by S&P.
Goldman is also set to price the California Department of Water Resources' $567.86 million of taxable power supply revenue bonds on Tuesday. The deal is rated Aa1 by Moody's, AA by S&P and AA-plus by Fitch.
Since 2008, the DWR has sold about $12.78 billion of debt, with the largest issuance occurring in 2010 when it sold about $4.9 billion. DWR also sold more than $1 billion in 2008 and 2011. The lowest year of issuance came in 2013, when it sold $166 million.
In the competitive arena on Tuesday, Paulding County, Ga., is selling $150.43 million of Series 2016 water and sewerage revenue improvement and refunding bonds. The deal is rated Aa3 by Moody's and AA by S&P.
The Louisville/Jefferson County Metro Government, Ky., is selling $154.4 million in two separate sales consisting of $91.25 million of Series 2016 general obligation bonds for the City Center project and $63.15 million of Series 1016A GOs. The deals are rated Aa1 by Moody's, AA-plus by S&P and triple-A by Fitch.
On Wednesday, Goldman Sachs is expected to price the New York Metropolitan Transportation Authority's $1.06 billion of Hudson Rail Yards Trust obligation bonds. The deal is rated A2 by Moody's and A-minus by Kroll Bond Rating Agency.
The largest competitive sales of the week will be coming on Wednesday from the Virginia Public Building Authority, which will offer three separate issues totaling $550 million.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.12 billion to $19.27 billion on Tuesday. The total is comprised of $4.13 billion of competitive sales and $15.13 billion of negotiated deals.
"The Bond Buyer's 30-day visible supply rose to $19.3 billion, the highest level in seven years, Alan Schankel, managing director, municipal strategy at Janney, wrote in a Tuesday market comment. "Fortunately, demand remains strong, evidenced by the record persistence (49 straight weeks) and strength ($48 billion year to date) of inflows to municipal mutual funds."
