Municipal bond buyers are set for a rush of new issuance to hit the market starting on Tuesday, with a heavy focus on infrastructure deals. Munis finished mixed on Monday in quiet trading.

“Munis are attractive," said one New York trader. "This is an elevated issuance week so I expect things to be extremely active. There is lots of cash ready to be put to work and with the Fed next week, issuance will be light so investors will want to take active of all the opportunities.”

Primary market
On Tuesday, Bank of America Merrill Lynch is expected to price the California Municipal Finance Authority’s $1.2 billion of Series 2018 A and B senior lien revenue bonds for the automated people mover project. The deal is rated BBB-plus by Fitch Ratings, which also assigned a stable outlook to the credit.

JPMorgan Securities is expected to price on Tuesday the Port of Seattle’s $567.38 million of Series 2018 A and B intermediate lien revenue bonds subject to the alternative minimum tax. The deal is rated A1 by Moody’s Investors Service, A-plus by S&P Global Ratings and AA-minus by Fitch.

BAML is set to price Connecticut’s $500 million of Series 2018 C and D general obligation bonds on Tuesday after a one-day retail order period. The deal is rated A1 by Moody’s, A-plus by S&P and Fitch and AA-minus by Kroll Bond Rating Agency.

Citigroup is set to price the Kentucky State Property and Building Commission’s $283 million of revenue bonds for Project No. 119 and agency fund revenue refunding bonds for Project No. 120. The deal is rated A1 by Moody’s, A-minus by S&P and A-plus by Fitch.

On the competitive front, Ohio is selling $300 million of Series 2018A common schools GOs. The deal is rated AA-plus by Fitch.

Also Tuesday, Clark County School District, Nev., is competitively selling $200 million of Series 2018A limited tax GO building bonds.

Seattle is competitively selling $269.985 million of Series 2018A municipal light and power improvement revenue bonds. The deal is rated Aa2 by Moody’s and AA by S&P.

The Southern California Metropolitan Water District is selling $165.64 million of subordinate water bonds in two competitive sales consisting of $100.01 million of Series 2018A revenue refunding bonds and $65.625 million of revenue bonds. The deals are rated AA-plus by S&P and Fitch.

Prior week's top underwriters
The top municipal bond underwriters of last week included Bank of America Merrill Lynch, Barclays Capital, Morgan Stanley, Raymond James & Associates, and RBC Capital Markets, according to Thomson Reuters data.

In the week of May 27 to June 2, BAML underwrote $703.2 million, Barclays $626 million, Morgan Stanley $373.1 million, Raymond James $300.6 million, and RBC $175.5 million.

Secondary market
Municipal bonds were mixed on Monday, according to a late read of the MBIS benchmark scale. Benchmark muni yields rose as much as one basis point in the six- to 30-year maturities, fell as much as one basis point in the one- to four-year maturities and were unchanged in the five-year maturity.

High-grade munis were also mixed, with yields calculated on MBIS’ AAA scale rising as much as one basis point in the five- to 30-year maturities and falling as much as one basis point in the one- to four-year maturities.

Municipals were mixed on Municipal Market Data’s AAA benchmark scale, which showed yields rising unchanged in the 10-year general obligation muni and rising two basis points in the 30-year muni maturity.

Treasury bonds were weaker as stock prices traded higher throughout the day.

On Monday, the 10-year muni-to-Treasury ratio was calculated at 83.1% while the 30-year muni-to-Treasury ratio stood at 95.3%, according to MMD. The muni-to-Treasury ratio compares the yield of tax-exempt municipal bonds with the yield of taxable U.S. Treasury with comparable maturities. If the muni/Treasury ratio is above 100%, munis are yielding more than Treasury; if it is below 100%, munis are yielding less.

Previous session's activity
The Municipal Securities Rulemaking Board reported 35,931 trades on Friday on volume of $12.19 billion.

California, Texas and New York were the states with the most trades, with the Golden State taking 15.439% of the market, the Lone Star State taking 9.603% and the Empire State taking 8.92%.

Prior week's actively traded issues
Revenue bonds comprised 55.77% of new issuance in the week ended June 1, up from 55.57% in the previous week, according to Markit. General obligation bonds made up 38.47% of total issuance, down from 38.83%, while taxable bonds accounted for 5.76%, up from 5.60% a week earlier.

Some of the most actively traded bonds by type were from California and Illinois issuers.

In the GO bond sector, the Santa Rosa High School District, Calif., 4s of 2043 traded 22 times. In the revenue bond sector, the Regents of the University of California 5s of 2048 traded 57 times. And in the taxable bond sector, the Illinois 5.1s of 2033 traded 34 times.

Treasury to sell $35B 4-week bills
The Treasury Department said it will sell $35 billion of four-week discount bills Tuesday. There are currently $90.001 billion of four-week bills outstanding.

Treasury auctions discount bills
Tender rates for the Treasury Department's latest $48 billion of 91-day and $42 billion of 182-day discount bills were higher, as the three-months incurred a 1.910% high rate, up from 1.895% the prior week, and the six-months incurred a 2.070% high rate, up from 2.030% the week before.

Coupon equivalents were 1.946% and 2.121%, respectively. The price for the 91s was 99.517194 and that for the 182s was 98.953500.

The median bid on the 91s was 1.890%. The low bid was 1.870%. Tenders at the high rate were allotted 55.71%. The bid-to-cover ratio was 3.16.

The median bid for the 182s was 2.050%. The low bid was 2.020%. Tenders at the high rate were allotted 91.10%. The bid-to-cover ratio was 3.27.

Gary Siegel contributed to this report.

Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation. Click here for a brief tour of the Workstation, or contact Vanessa Kim at 212-803-8474 for more information.

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Chip Barnett

Chip Barnett

Chip Barnett is a journalist with more than 40 years of experience. Barnett is currently Senior Market Reporter for The Bond Buyer.
Aaron Weitzman

Aaron Weitzman

Aaron Weitzman is a markets reporter for The Bond Buyer, focusing on the sell side of the municipal bond market.