Municipal bond prices finished weaker on Monday, according to traders, with yields on top-quality munis rising by as much as two basis points.
In the primary, total new issue supply coming this week is estimated at $6.24 billion, which is comprised of $4.81 billion of negotiated deals and $1.43 billion of competitive sales.
Secondary Market
The yield on the 10-year benchmark muni general obligation was two basis points stronger at 2.06% from 2.04% on Friday, while the yield on the 30-year GO was one basis point stronger at 3.08% from 3.07%, according to the final read of Municipal Market Data's triple-A scale.
Treasury prices were lower on Monday, with the yield on the two-year Treasury rising to 0.75% from 0.73% on Friday, while the 10-year yield rose to 2.18% from 2.15% and the 30-year yield increased to 2.95% from 2.93%.
The 10-year muni to Treasury ratio was calculated on Monday at 94.4% versus 93.8% on Friday, while the 30-year muni to Treasury ratio stood at 104.3% compared to 103.5%, according to MMD.
Primary Market
The Clark County School District, Nev., leads off the calendar on Tuesday with two separate competitive sales totaling over $500 million.
The school district will sell $342 million of Series 2015C limited tax general obligation building and refunding bonds and $200 million of Series 2015B limited tax GO school bonds additionally secured by pledged revenues.
The bonds are rated A1 by Moody's Investors Service and AA-minus by Standard & Poor's.
The district last sold comparable bonds on Feb. 24 when Bank of America Merrill Lynch won $258 million of Series 2015A GOLT refunding bonds with a true interest cost of 1.05%.
On the competitive short term slate, the Louisville and Jefferson County, Ky., Metropolitan Sewer District is selling $226 million of Series 2015 sewer and drainage system subordinated bond anticipation notes. The BANs, which are due Nov. 22, 2016, are rated MIG1 by Moody's.
The district last sold BANs on Nov. 4, 2014, to BAML, which won the Series 2014 notes with a TIC of 0.29%.
Bank of America Merrill Lynch is expected to price the Los Angeles Municipal Improvement Corp.'s $298 million of Series 2015A taxable convention center lease revenue refunding bonds on Tuesday. The issue is rated A-plus by S&P and Fitch Ratings.
Wells Fargo Securities is set to priced San Antonio, Texas' $235 million of CPS energy electric and gas system revenue bonds on Tuesday. The bonds are rated Aa1 by Moody's, AA by S&P and AA-plus by Fitch.
On Thursday, Citigroup is set to price the Massachusetts Transportation Fund's $450 million of Series 2015A special obligation revenue bonds under the Rail Enrichment Program after a one-day retail order period on Wednesday. The bonds are rated triple-A by Moody's and S&P.
Barclays Capital is slated to price the California Health Facilities Financing Authority's Series 2015 refunding revenue bonds for the Cedars-Sinai Medical Center on Thursday afternoon after a morning retail order period. The issue is rated Aa3 by Moody's and AA-minus by Fitch Ratings.
Also on Thursday, Morgan Stanley will price the state of Hawaii's $247 million of airport system Series 2015A AMT and Series 2015B non-AMT revenue bonds.
"Both Moody's and S&P upgraded Hawaii Airport ahead of this week's $247 million sale. S&P moved the rating to A-plus from A, citing consistently strong liquidity, a moderately low debt burden, and low cost structure," Janney Municipal Strategist Alan Schankel, wrote in a Monday comment. "Moody's, which moved its rating to A1 from A2, noted the system's monopoly position relative to commercial air travel in the state as well as how vital the airport is to both the important tourism business and intrastate travel."
The system includes 15 airports with Honolulu International being the 28th busiest airport in the United States.
While enplanement growth at the international airport was flat in fiscal year 2015, Schankel said that enplanements in the overall system grew by 2.5%.
Previous Week's Actively Traded Sectors
Revenue bonds comprised 55.38% of new issuance in the week ended Oct. 30, down from 56.55% in the previous week, according to Markit. General obligation bonds comprised 36.47% of total issuance, up from 35.44%, while taxable bonds made up 8.15%, up from 8.01%.
Some of the most actively traded issues in the week were in New Jersey, Puerto Rico and California.
In the revenue bond sector, the New Jersey Turnpike Authority 5s of 2045 were traded 119 times. In the GO bond sector, the Puerto Rico commonwealth 8s of 2035 were traded 38 times. And in the taxable bond sector, the California 7.55s of 2039 were traded 27 times, Markit said.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 30,490 trades on Friday on volume of $9.44 billion.
