The municipal bond market is awaiting the biggest deal of the week and the most watched deal of the week on Wednesday as the Alameda Corridor Transportation and city of Chicago offerings are set for sale.
Secondary Market
U.S. Treasuries were mixed on Wednesday. The yield on the two-year Treasury rose to 0.73% from 0.72% on Tuesday, while the 10-year Treasury yield fell to 1.75% from 1.76% and the yield on the 30-year Treasury bond was unchanged from 2.61%.
Top-shelf municipal bonds finished stronger on Tuesday. The yield on the 10-year benchmark muni general obligation fell one basis point to 1.56% from 1.57% on Monday, while the 30-year muni yield declined one basis point to 2.48% from 2.49%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 88.8% on Tuesday compared with 89.4% on Monday, while the 30-year muni to Treasury ratio stood at 95.0% versus 95.1%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,886 trades on Tuesday on volume of $10.57 billion.
Primary Market
On Wednesday, Bank of America Merrill Lynch is set to price the Alameda Corridor Transportation Authority, Calif.'s $662 million of Series 2016 A&B tax-exempt subordinate and second subordinate lien revenue refunding bonds.
The Series A bonds are rated Baa2 by Moody's Investors Service and BBB-plus by Standard & Poor's Global Ratings and Fitch Ratings. The Series B bonds are rated Baa2 by Moody's and BBB by S&P and Fitch.
Chicago is coming to market with a $546 million sale of tax-exempt and taxable and second lien water revenue bonds. PNC Capital Markets is expected to price the deal on Wednesday. The issue is rated AA by Kroll Bond Rating Agency.
Since 2006, Chicago has issued about $24 billion of debt, with the most issuance occurring in 2015 when the city sold $4.24 billion of securities. The Windy City offered the least amount of bonds in 2009 when it sold $777.9 million of securities.
Loop Capital Markets is set to price the Los Angeles International Airport's $293 million of Series 2016A subordinate revenue bonds on Wednesday. The deal, which is subject to the alternative minimum tax, is rated A1 by Moody's and AA-minus by S&P and Fitch.
Morgan Stanley is expected to price the state of Oregon's $306 million of Series 2016 D, E, F, G and H Article XI-M seismic projects and Article XI-Q state projects general obligation bonds on Wednesday. The bonds are rated Aa1 by Moody's and AA-plus by S&P and Fitch.
Since 2006, the state of Oregon has sold about $4.27 billion of bonds including the current issue, with the largest issuance occurring in 2013 when it offered $719 million of debt. The Beaver State sold the least amount of debt in 2009 when is issued $107 million of bonds.
BAML is set to price the New Jersey Higher Education Student Assistance Authority's $190 million of Series 2016 A1 and 1B senior and subordinate student loan revenue bonds on Wednesday. The deal is rated Aa2 by Moody's and AA by S&P.
Barclays Capital is expected to price the Texas Public Finance Authority's $188.66 million of general obligation refunding bonds on Wednesday. The deal is rated triple-A by Moody's, S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $1.83 billion to $12.55 billion on Wednesday. The total is comprised of $5.63 billion of competitive sales and $6.92 billion of negotiated deals.
