Prices of top-quality municipal bonds were mostly stronger at mid-session, traders said, as yields were steady to as much as one basis point lower.
Meanwhile, the market was seeing the first of the week's $8 billion in new muni issuance come to market.
Secondary Market
The yield on the 10-year benchmark muni general obligation was unchanged to down by as much as one basis point from 2.33% on Monday, while the yield on the 30-year GO was steady to down by as much as one basis point from 3.31%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were stronger on Tuesday, with the yield on the two-year Treasury note dropping to 0.64% from 0.67% on Monday, while the 10-year yield declined to 2.41% from 2.43% and the 30-year yield decreased to 3.20% from 3.21%.
The 10-year muni to Treasury ratio was calculated on Monday at 96.2% versus 96.0% on Friday, while the 30-year muni to Treasury ratio stood at 103.3% compared to 103.2%, according to MMD.
Primary Market
In the competitive arena, Virginia Pubic School Authority sold $98.02 million of Series 2015 special obligation school financing bonds for Prince William County. Morgan Stanley won the bonds with a true interest cost of 2.89%. Pricing information was not immediately available. The deal was rated triple-A by Moody's Investors Service, Standard & Poor's and Fitch Ratings.
The county will use the proceeds to pay the costs of various capital school improvement projects.
The PSA last sold comparable bonds competitively for Prince William County on Sept. 23, 2014 when Citigroup won $82.55 million of Series 2014 special obligation school financing bonds with a TIC of 2.62%.
Raymond James priced the Comal Independent School District, Texas' $138.48 million of Series 2015 A&B unlimited tax school building bonds. The Series A bonds were priced to yield from 0.30% with a 2% coupon in 2016 to 1.46% with a 5% coupon in 2020. The Series B bonds were priced to yield from 0.35% with a 2% coupon in 2016 to 3.98% with a 4% coupon in 2040. The issue is backed by the Permanent School Fund guarantee and is rated triple-A by Moody's and Fitch.
San Antonio, Texas is expected to come to market with $317.71 million of electric and gas systems revenue refunding bonds, Series 2015. The bonds will be priced by Goldman, Sachs and are rated Aa1 by Moody's Investors Service, AA by Standard and Poor's and AA-plus by Fitch Ratings.
Citi is scheduled to price the Arizona School Facilities Board's $258 million of refunding certificates of participation on Tuesday. The COPs are expected to mature serially from 2016-2023 and are rated triple-A by both Moody's and S&P.
Piper Jaffray is slated to price the Montgomery Independent School District's $245.28 million of unlimited tax building and refunding bonds on Tuesday. This deal by the Texas ISD is backed by the Permanent School Fund guarantee program and is rated triple-A by both Moody's and S&P.
On Wednesday, JPMorgan is expected to price the California State University Trustees' $1.1 billion of systemwide revenue bonds.
The issue is expected to consist of $1.07 million Series 2015A tax-exempts, due 2015-2014, and $30 million of Series 2015B taxable, due 2016-2035. The bonds are rated Aa2 by Moody's and AA-minus by S&P.
Since 1996, the Trustees of the California State University have issued roughly $6.75 billion of debt. The years that saw the most issuance were in 2005 and 2014, when the University issued $1.34 billion and $748 million of debt, respectively. The University did not come to market at all in 1997, 2001 or 2006.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 35,869 trades on Monday on volume of $4.545 billion.
The most active bond, based on the number of trades was the FSU Financial Assistance Inc., Fla.'s Series 2015A educational and athletic facilities improvement revenue 4 1/4s of 2045, which traded an 94 times at an average price of 99.533 and an average yield of 4.274%. The bonds were initially priced at 97.501 to yield 4.40%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.342 billion to $14.102 billion on Tuesday. The total is comprised of $3.01 billion competitive sales and $11.09 billion of negotiated deals.
