Muni market set for Texas TRANs

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.

BB-082317-MUN

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
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