Municipal bond traders were waiting for new supply to come to market as they watch yields on top-rated munis move lower. In the past three sessions, yields have fallen by seven basis points.
In the primary, the New York City Housing Development Corp.'s $564 million of Sustainable Neighborhood bond are slated to be priced in the negotiated sector while Baltimore County, Md., will offer $98 million of refunding bonds in the competitive arena.
Secondary Market
Treasury prices were higher on Tuesday with the yield on the two-year Treasury note falling to 0.69% from 0.70% on Monday, while the 10-year yield decreased to 2.32% from 2.36% and the 30-year yield dropped to 3.05% from 3.09%.
The yield on the 10-year benchmark muni general obligation on Monday finished down two basis points to 2.31% from 2.33% on Friday, while the yield on the 30-year GO was off by one basis point to 3.29% from 3.30%, according to the final read of Municipal Market Data's triple-A scale. Intermediate maturities fell by as much as three basis points, according to MMD.
The 10-year muni to Treasury ratio was calculated on Monday at 98.0% versus 97.9% on Friday, while the 30-year muni to Treasury ratio stood at 106.5% compared to 109.1%, according to MMD.
Primary Market
On Tuesday, JPMorgan is slated to price the New York City Housing Development Corp.'s $563.85 million of multi-family housing revenue bonds for the Sustainable Neighborhood Program.
The issue is initially structured as $496.45 million of Series 2015 D-1 fixed-rate bonds, $64.14 million of Series 2015 D-2 fixed-rate bonds and $3.26 million of Series 2014 Series I fixed-rate bonds. The issue is rated Aa2 by Moody's and AA-plus by S&P.
The NYC HDC is also coming to market on Tuesday with a $40 million sale of taxable multi-family housing revenue bonds to be priced by Citi. The Sustainable Neighborhood bonds are initially structured as serials maturing from 2016 to 2025 and terms in 2030, 2035 and 2044.
Sustainable Neighborhood bonds are a new category of social investment bonds and the first for affordable housing in the United States.
In total, the HDC's Board of Directors voted to authorize $842 million in Sustainable Neighborhood bonds, including Tuesday's deals.
"The financing that the board approved will create and preserve safe, quality affordable housing that provides deeper levels of affordability, serves some of the most vulnerable New Yorkers, and fosters greater economic diversity and stronger neighborhoods," HDC President Gary Rodney told The Bond Buyer.
On Monday, Goldman, Sachs priced the New York City Transitional Finance Authority's $750 million of Series S-2 Fiscal 2015 building aid revenue bonds for retail investors. The new money BARBs have a second day of retail orders on Tuesday ahead of the institutional pricing on Wednesday.
The bonds were priced for retail to yield from 1.15% with 2% and 5% coupons in a split 2018 maturity to 3.45% with a 5% coupon in 2035; a 2044 term bond was priced as 4s to yield about 4.029%; a 2044 term bond was priced as 4s to yield about 4.029%. The 2016 and 2017 maturities were offered as sealed bids; no retail orders were taken in the 2028 through 2030 maturities, in the 2032 through 2034 maturities or in the 2040 and 2043 maturities.
The 5s at 2.62% in 2025 were 28 basis points over the MMD benchmark, while the 5s at 3.45% in 2035 were 40 basis points over the MMD benchmark with the maximum yield of the 4s of 2044 at 4.029% were about 73 basis points over the MMD benchmark.
The BARBs are rated Aa2 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings.
JPMorgan is expected to price the Monroe County, N.Y., Industrial Development Corp.'s $300.62 million of bonds for the University of Rochester on Tuesday. The issue is initially structured as $182.61 million of Series 2015A tax exempt bonds, $56.59 million of Series 2015B tax-exempt bonds and $61.43 million of Series 2015C taxable bonds. The bonds are rated Aa3 by Moody's and AA-minus by S&P and Fitch.
Bank of America Merrill Lynch is set to price the Florida Municipal Power Agency's $277 million of Series 2015 B&C all requirements power supply project revenue and refunding bonds for retail on Tuesday; the institutional pricing will be held on Wednesday. The bonds are rated A2 by Moody's and A-plus by S&P.
In the competitive arena, Baltimore County, Md., will offer $97.89 million of Series 2015 Metropolitan District refunding bonds on Tuesday. The bonds are initially structured to mature serially from 2016 through 2026. The issue is rated triple-A by Moody's, S&P and Fitch.
Also on Tuesday, Lake County, Ill., is offering $90 million of Series 2015A GOs backed by a sales tax alternative revenue source. The bonds are initially structured to mature serially from 2015 through 2025. The GOs are rated triple-A by Moody's and S&P.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,593 trades on Monday on volume of $8.055 billion.
The most active bond, based on the number of trades, was the Miami-Dade County, Fla.'s Series 2015A aviation revenue refunding AMT 4 1/2s of 2045, which traded 103 times at an average price of 100.80 with an average yield of 4.385%. The bonds were initially priced at 98.369 to yield 4.60%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.60 billion to $12.63 billion on Tuesday. The total is comprised of $3.48 billion competitive sales and $9.15 billion of negotiated deals.
