Municipal bond traders are returning to work on Monday and will see another healthy new-issue calendar on deck as volume for the week is estimated at $8.16 billion.
Secondary Market
U.S. Treasuries were weaker on Monday. The yield on the two-year Treasury rose to 0.72% from 0.70% on Friday, while the 10-year Treasury yield gained to 1.67% from 1.62% and the yield on the 30-year Treasury bond increased to 2.48% from 2.43%.
Top shelf municipal bonds finished weaker on Friday, according to traders, as yields moved off their recent record lows. The yield on 10-year benchmark muni general obligation rose one basis point to 1.43% from a record low of 1.42% hit on Thursday, while the 30-year muni yield increased one basis point to 2.14%, up from its record low level of 2.13%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 88.5% on Friday compared to 87.5% on Thursday, while the 30-year muni to Treasury ratio stood at 88.1% versus 88.0%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 30,125 trades on Friday on volume of $8.71 billion.
Prior Week's Actively Traded Issues
Revenue bonds comprised 52.16% of new issuance in the week ended June 17, up from 51.74% in the previous week, according to data released by Markit. General obligation bonds comprised 39.97% of total issuance, down from 40.59%, while taxable bonds made up 7.87%, up from 6.67%.
Some of the most actively traded issues by type were from Texas, Massachusetts and New York. In the GO bond sector, the Harris County, Texas 5s of 2047 were traded 32 times. In the revenue bond sector, the Mass. Development Finance Agency 5s of 2043 were traded 38 times. And in the taxable bond sector, the DASNY 3.879s of 2046 were traded 14 times.
Previous Week's Top Underwriters
The top negotiated and competitive underwriters of last week included JPMorgan Securities, Bank of America Merrill Lynch, Citigroup, Goldman Sachs and Barclays Capital, according to Thomson Reuters data. In the week of June 12-June 18, JPMorgan underwrote $1.07 billion, BAML did $1.04 billion, Citi had $556 million, Goldman did $501 million and Barclays had $299 million.
Primary Market
This week's calendar consists of $6.42 billion of negotiated deals and $1.74 billion of competitive sales.
Action gets underway on Tuesday when Morgan Stanley prices the city of Los Angeles' $1.46 billion of tax and revenue anticipation notes.
Proceeds of the sale will be used to make prepayments to its police, fire and city employees' retirement system; another $400 million will go to the cash flow fund.
The TRANs are rated MIG1 by Moody's Investors Service SP1-plus by S&P Global Ratings and F1-plus by Fitch Ratings.
Morgan Stanley is also set to price the New York Metropolitan Transportation Authority's $507.45 million of Series 2016B transportation revenue refunding bonds for retail investors on Tuesday ahead of the institutional pricing on Wednesday.
And Morgan Stanley will price the New York State Housing Finance Agency's $302.69 million of Series 2016C affordable housing revenue bonds on Tuesday.
Citigroup is expected to price Iowa's $264 million of IJobs Program special obligation refunding bonds on Tuesday. The deal is rated Aa2 by Moody's and AA by S&P.
Bank of America Merrill Lynch is set to price the California Housing Finance Agency's $236 million of Series 2016A taxable home mortgage revenue bonds on Tuesday. The deal is rated A2 by Moody's and AA-minus by S&P.
RBC Capital Markets is expected to price the Pennsylvania Housing Finance Agency's $234.62 million of single-family mortgage revenue bonds on Tuesday. The deal is rated Aa2 by Moody's and AA-plus by S&P.
BAML is set to price Wayne County, Mich.'s $173 million of taxable general obligation tax revenue notes on Tuesday. The notes are rated SP1 by S&P.
JPMorgan Securities is expected to price the Reedy Creek Improvement District, Fla.'s $165 million of Series 2016A ad valorem tax bonds on Tuesday. The deal is rated Aa3 by Moody's and AA-minus by S&P and Fitch.
Wells Fargo Securities is set to price the Port of Morrow, Ore.'s $120 million of taxable Series 2016-2 transmission facilities revenue bonds for the Bonneville Cooperation Project No. 5 on Tuesday. The deal is rated Aa1 by Moody's and AA by Fitch.
JPMorgan is expected to price the Gilbert Water Resources Municipal Property Corp., Ariz.'s $110 million of Series 2016 senior lien utility system revenue and revenue refunding bonds on Tuesday. The deal is rated triple-ZA by S&P and AA-plus by Fitch.
In the competitive sector on Tuesday, the Virginia College Building Authority is selling $234.39 million of Series 2016A educational facilities revenue refunding bonds under the public higher education financing program. The deal is rated Aa1 by Moody's, AA by S&P and AA-plus by Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.91 billion to $12.99 billion on Monday. The total is comprised of $3.78 billion of competitive sales and $9.22 billion of negotiated deals.
