Prices of top-rated municipal bonds were weaker at mid-session, traders said, with yields on some longer-dated maturities up by as much as three basis points.
In the primary, several new deals came to market, topped by a big competitive sale from a Texas school issuer.
Secondary Market
The yield on the 10-year benchmark muni general obligation was up by as much as two basis points from 2.00% from Monday, while the yield on the 30-year GO was up by as much as three basis points from 2.90%, according to a read of MMD's triple-A scale.
Treasury prices were also lower on Tuesday as the yield on the two-year Treasury note increased to 0.56% from 0.52% on Monday, while the 10-year yield was up to 1.96% from 1.92% and the 30-year yield increased to 2.65% from 2.60%.
The 10-year muni to Treasury ratio was calculated on Monday at 104.0% versus 104.3% on Friday, while the 30-year muni to Treasury ratio stood at 111.1% compared to 110.8%, according to MMD.
Primary Market
In the competitive arena, the Humble Independent School District, Texas, sold $218.10 million of Series 2015A unlimited tax school building and refunding bonds.
Bank of America Merrill Lynch won the issue with a true interest cost of 3.0663%. The issue was priced as serials to yield from 0.25% with a 5% coupon in 2016 to 3.58% with a 3.50% coupon in 2039.
The bonds are backed by the Texas Permanent School fund guarantee and rated triple-A by Moody's Investors Service and Standard & Poor's.
The last time the district sold bonds competitively was on April 10, 2007, when Prager Sealy won $25 million of Series 2007A unlimited tax school building bonds with a true interest cost of 4.6243%.
In the negotiated sector, Bank of America Merrill Lynch priced the Nebraska Public Power Generation Agency's $206.05 million of Series 2015A revenue refunding bonds for the Whelan Energy Center's Unit 2. The bonds were priced as 5s to yield from 1.16% in 2018 to 3.44% in 2032. The issue is rated A2 by Moody's, BBB-plus by S&P and A-minus by Fitch Ratings.
JPMorgan Securities is slated to price the New Hampshire Health and Educational Facilities Authority's $110 million of revenue bonds for the University System of New Hampshire. A retail order period was held Monday. The bonds are rated Aa3 by Moody's and A-plus by S&P.
The HEFA has sold roughly $5.634 billion of bonds since 1995. The highest years of issuance came in 2007 and 2009, when it issued $588.1 million and $592 million of debt, respectively. The Granite State's HEFA saw its low years of issuance in 1995 and 2013, when it sold just $24.7 million and $57 million, respectively. Although it did not issue bonds in 2014, it has been coming to market at an average of roughly 9 times a year since 1995.
And a $209 million GO sale is on tap from the Grossmont Healthcare District in California. Goldman, Sachs is scheduled to the price the issue. The bonds are rated Aa2 by Moody's.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 35,698 trades on Monday on volume of $7.484 billion.
The most active bond, based on the number of trades, was the Pennsylvania State Turnpike Commission's 2015 Subordinate Sub-Series A-1 revenue 4s of 2041, which traded 184 times at an average price of 99.72 with an average yield of 3.985%. The bonds were initially priced at 98.386 to yield 4.10%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.011 billion to $8.763 billion on Tuesday. The total is comprised of $4.131 billion competitive sales and $4.632 billion of negotiated deals.
