Muni market set for Texas TRANs

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The state of Texas is selling the biggest deal of the week on Tuesday — a $5.4 billion note offering, which is also the biggest short-term sale so far this year.

Secondary market
Treasuries were narrowly mixed on Tuesday. The yield on the two-year Treasury rose to 1.32% from 1.30% on Monday, the 10-year Treasury yield gained to 2.20% from 2.18% and the yield on the 30-year Treasury bond was unchanged from 2.77%.

Top-quality municipal bonds finished stronger on Monday. The yield on the 10-year benchmark muni general obligation fell one basis point to 1.90% from 1.91% on Friday, while the 30-year GO yield declined one basis point to 2.75% from 2.76%, according to the final read of Municipal Market Data's triple-A scale.

The 10-year muni-to-Treasury ratio was calculated at 87.2% on Monday, compared with 87.0% on Friday, while the 30-year muni-to-Treasury ratio stood at 99.5% versus 99.3%, according to MMD.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 31,000 trades on Monday on volume of $5.45 billion.

Primary Market
Action will gets underway on Tuesday, as Texas will sell by competitive bid $5.4 billion of Series 2017 tax and revenue anticipation notes.

The notes, due Aug. 20, 2018, are rated MIG1 by Moody’s Investors Service, SP1-plus by S&P Global Ratings, F1-plus by Fitch Ratings and K1-plus by Kroll Bond Rating Agency.

Since 2007 Texas has issued $62.2 billion in short-term notes with the most issuance occurring in 2011 and 2012, $9.8 billion each year. The Lone Star State did not sell notes in 2015 or 2016.
Also on Tuesday, the Bend La Pine Administrative School District No. 1, Ore., is competitively selling $175 million of Series 2017 general obligation bonds.

The deal, which is backed by the Oregon School Bond Guaranty program, is rated Aa1 by Moody’s and AA-plus by S&P.

In the negotiated sector on Tuesday, Wells Fargo Securities is set to price the Washington Health Care Facilities Authority’s $265.895 million of Series 2017 revenue bonds for the Virginia Mason Medical Center.

The deal is rated Baa2 by Moody’s and BBB by S&P.

Piper Jaffray is expected to price the South Dakota Health and Education Facilities Authority’s $210 million of Series 2017 revenue bonds for Regional Health.

The deal is rated A1 by Moody’s.

Bank of America Merrill Lynch is set to price Jacksonville, Fla.’s $146 million of Series 2017A and 2017B special revenue and refunding bonds.

The deal is rated Aa2 by Moody’s and AA-minus by S&P and Fitch.

Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar increased $4.21 million to $11.91 billion on Tuesday. The total is comprised of $3.25 billion of competitive sales and $8.66 billion of negotiated deals.

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Primary bond market Secondary bond market State of Texas Bend La Pine School District No. 1, OR Washington Health Care Facilities Authority South Dakota Health and Educational Facilities Authority City of Jacksonville, FL