Municipal bond traders are set to see more supply enter the market on Wednesday, led by several California issuers.
Secondary Market
Treasuries were mixed on Wednesday. The yield on the two-year Treasury fell to 0.74% from 0.75% on Tuesday, the 10-year Treasury yield was unchanged from 1.56% and the yield on the 30-year Treasury bond increased to 2.29% from 2.28%.
Top-rated municipal bonds finished stronger on Tuesday. The yield on the 10-year benchmark muni general obligation fell three basis points to 1.48% from 1.51% on Monday, while the yield on the 30-year dropped three basis points to 2.27% from 2.30%, according to the final read of Municipal Market Data's triple-A scale.
On Tuesday, the 10-year muni to Treasury ratio was calculated at 95.2% compared to 95.1% on Monday, while the 30-year muni to Treasury ratio stood at 99.7% versus 98.3%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 32,558 trades on Tuesday on volume of $12.55 billion.
Primary Market
Bank of America Merrill Lynch priced the Irvine Ranch Water District, Calif.'s $104.55 million of Series 2016 bonds on Wednesday.
The issue was priced as 5s to yield from 1% in 2022 to 2.20% in 2036, 2.30% in 2041 and 2.35% in 2046.
The deal is rated triple-A by S&P Global Ratings and Fitch Ratings.
Since 2006, the district has issued about $1.2 million of debt, with the largest issuance in 2010 when it sold $260.1 million of securities. The district did not sell any debt from 2012 to 2015, returning to the market this year when it issued $116.8 million of certificates of participation in August.
Goldman Sachs is set to price the Anaheim Housing and Public Improvements Authority, Calif.'s $290.44 million of Series 2016A tax-exempt and Series 2016B taxable electric utility distribution system revenue bonds for Anaheim Public utilities. The deal is rated AA-minus by S&P and Fitch.
Morgan Stanley is expected to price the Foothill-De Anza Community College District, Calif.'s $256.65 million of revenue bonds on Wednesday. The deal is rated triple-A by Moody's and S&P.
In the competitive arena, the Galena Park Independent School District, Texas, is selling $102.71 million of Series 2016 unlimited tax school building and refunding bonds. The deal is backed by the Permanent School Fund guarantee program and rated triple-A by S&P and Fitch.
The district last competitively sold comparable bonds on June 23, 2013, when Stifel won $9.44 million of Series 2015 unlimited tax refunding bonds.
On Thursday, Citi is set to price Hawaii's $676 million of general obligation, GO refunding and taxable GO bonds. The deal is rated Aa1 by Moody's and AA-plus by S&P; Fitch affirmed the state at AA.
Also on Thursday, Morgan Stanley is expected to price Massachusetts' $430.28 million of Series 2016A transportation fund revenue bonds for rail enhancement and accelerated bridge programs and Series 2016A transportation fund revenue refunding bonds. The deal is rated Aa1 by Moody's and triple-A by S&P.
Morgan Stanley is also set to price Massachusetts' $127.17 million of Series 2016A federal highway grant anticipation notes for the accelerated bridge program. The deal is rated Aa2 by Moody's.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $2.94 billion to $16.41 billion on Wednesday. The total is comprised of $3.46 billion of competitive sales and $12.96 billion of negotiated deals.
