Prices of top-rated municipal bonds closed steady to slightly weaker on Monday, traders said, with yields unchanged to one basis point higher.
In the primary, market attention turned to New York City, as retail orders were taken for a second day on the Transitional Finance Authority's $750 million offering.
Secondary Market
The yield on the 10-year benchmark muni general obligation finished one basis point stronger at 2.15% from 2.14% on Friday, while the yield on the 30-year GO was steady from 3.13%, according to the final read of Municipal Market Data's triple-A scale.
On Monday, Sept. 14, the 10-year muni yields stood at 2.23% while the 30-year muni yield was at 3.20%.
Treasury prices were lower, with the yield on the two-year Treasury note rising to 0.71% from 0.67% on Friday, while the 10-year yield rose to 2.20% from 2.13% and the 30-year yield increased to 3.03% from 2.93%.
The 10-year muni to Treasury ratio was calculated on Monday at 97.1% versus 100.6% on Friday, while the 30-year muni to Treasury ratio stood at 103.2% compared to 106.9%, according to MMD.
Primary Market
Municipal bond volume for the week is estimated at $4.12 billion, according to Ipreo, consisting of $3.16 billion of negotiated deals and $957.2 million of competitive sales.
The largest bond offerings will be coming from the NYC TFA, which is selling a total of $1 billion in deals in both the negotiated and competitive sectors.
Goldman Sachs on Friday priced the TFA's $750 million of future tax secured tax-exempt subordinate bonds for retail investors. A second day of retail orders was held on Monday with the institutional pricing tentatively scheduled for Tuesday.
On Monday, the issue was repriced for retail to yield from 0.89% with a 3% coupon in 2018 to 3.74% with a 3.625% coupon in 2039; a 2017 maturity was offered as a sealed bid while no retail orders were taken in the 2029, 2032-2034, and 2036-2037 maturities.
On Friday, the issue was priced for retail to yield from 0.92% with a 3% coupon in 2018 to 3.82% with a 3.75% coupon in 2039; a 2017 maturity was offered as a sealed bid while no retail orders were taken in the 2028-2029, 2031-2034, and 2036-2038 maturities.
In the competitive arena, the TFA will sell $250 million of future tax secured taxable subordinate bonds in two separate sales on Tuesday. The sales consist of $190 million of Fiscal 2016 Series A Subseries A2 taxables and $60 million of Fiscal 2016 Series A Subseries A3 taxables.
All issues are rated Aa1 by Moody's Investors Service and triple-A by Standard & Poor's and Fitch Ratings.
Citigroup is scheduled to price Wayne County Airport Authority, Mich.'s $588 million of new money and refunding bonds on Tuesday.
WCAA officials are highlighting its legal separation from its struggling home county as the operator of Detroit's airport expects to save more than $3.5 million annually in debt service from the refunding piece of the deal. Part of the transaction will restructure debt originally issued by the county into debt backed by general airport revenues. The authority says it will save $1 million a year by wiping the county's pledge off the borrowing and replacing it with its own.
The airport's senior-lien bonds are rated A2 by Moody's, A by S&P and A-minus by Fitch. All three agencies maintain a stable outlook on the credit.
Wells Fargo Securities is expected to price the San Francisco Bay Area Transit District's $358.56 million offering, which consists of $187.63 million of sales tax refunding bonds, rated AA-plus by S&P and Fitch, pricing on Tuesday, and $170.93 million of general obligation refunding bonds, rated triple-A by Moody's and S&P, pricing on Thursday.
Goldman is slated to price the Sacramento Public Financing Authority's $274 million of Series 2015 taxable lease revenue bonds for the Golden 1 Center on Wednesday. The bonds are rated A-plus by S&P and A by Fitch.
Barclays Capital is expected to price Toledo Hospital's $270 million of Series 2015A taxable corporate CUSIP bonds for the ProMedica Healthcare Obligated group on Thursday. The issue is rated Aa3 by Moody's and AA by S&P.
Morgan Stanley is set to price the state of Mississippi's $200 million of Series 2015E gaming tax revenue bonds. The issue is rated A3 by Moody's and A-plus by S&P and Fitch.
In the short-term competitive sector, the state of Massachusetts is selling three separate note deals totaling $1.2 billion on Tuesday. The deals consist of $400 million of Series 2015A general obligation revenue anticipation notes, $400 million of Series 2015B GO RANs, and $400 million of Series 2015C GO RANs.
The RANs are rated MIG1 by Moody's, SP1-plus by S&P and F1-plus by Fitch.
Prior Week's Actively Traded Issues by Sector
Revenue bonds comprised 54.12% of new issuance in the week ended Sept. 18, down from 57.78% in the previous week, according to Markit. General obligation bonds comprised 36.88% of total issuance, up from 33.27%, while taxable bonds made up 9.00%, up from 8.95%.
Some of the most actively traded issues last week were in Oklahoma, Pennsylvania and California.
In the revenue bond sector, the University of Oklahoma 4s of 2045 were traded 104 times. In the GO bond sector, the Philadelphia 4s of 2035 were traded 36 times. And in the taxable bond sector, the California 7.55s of 2039 were traded 11 times, Markit said.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 31,996 trades on Friday on volume of $7.712 billion.
