The municipal bond market will keep an eye on the Chicago Public Schools issue, which was postponed last week.
New issue volume is estimated at $5.37 billion, consisting of $4.01 billion of negotiated deals and $1.36 billion of competitive sales.
Last week the Chicago Public Schools postponed its $875 million general obligation bond deal. Chicago Board of Education officials placed the offering on the day-to-day negotiated calendar. But CPS Chief Executive Officer Forrest Claypool said last Thursday the board expects to bring the sale to market early this week.
While CPS has been battered by negative headlines over rating downgrades and a Republican-led effort pushing for state oversight and possible bankruptcy, the district got some positive news that contract talks with the Chicago Teachers Union had broken through a logjam.
Wednesday's postponement decision came as the market awaited the deal following the Tuesday release of a pre-marketing pricing scale that offered rich yield premiums, with spreads of more than 500 basis points from the Municipal Market Data's benchmark. That was 200 basis points higher than the district's sale in April.
Primary Market
On Monday, King County, Wash., will competitively sell $279.08 million of Series 2016A sewer refunding revenue bonds. The deal is rated Aa2 by Moody's Investors Service and AA-plus by Standard & Poor's.
The county last competitively sold comparable bonds on Oct. 26, 2015, when Bank of America Merrill Lynch won $93.35 million of Series 2015B sewer improvement and refunding revenue bonds with a true interest cost of 3.36%.
On Tuesday, Nassau County, N.Y., will competitively sell $120.14 million of Series 2016B general improvement bonds. The issue is rated A2 by Moody's, A-plus by S&P and A by Fitch. The county last competitively sold comparable bonds on May 20, 2015, when JPMorgan won $168.90 million of Series 2015B general improvement bonds with a TIC of 3.78%.
Piper Jaffray is expected to price San Antonio, Texas' $215.39 million of water system junior lien revenue refunding bonds consisting of Series 2016A and Series 2016B taxable bonds on Tuesday. The deal is rated Aa2 by Moody's and AA by S&P.
Bank of America Merrill Lynch is set to price the county of Hawaii's $235 million of Series 2016 A, B, C, D E, and F taxable general obligation bonds for retail investors on Tuesday ahead of the institutional pricing on Wednesday. The deal is rated Aa2 by Moody's.
Topping the calendar is a $1.2 billion negotiated deal from the Florida State Board of Administration Finance Corp. JPMorgan Securities is slated to price the Series 2016A taxable revenue bonds on Thursday. The issue, which is tentatively structured as 2019 and 2021 bullet maturities, is rated Aa3 by Moody's Investors Service and AA by Standard & Poor's and Fitch ratings.
Morgan Stanley is expected to price the Dallas Area Rapid Transit's Series 2016A senior lien sales tax revenue refunding bonds on Thursday. The DART deal is rated Aa2 by Moody's and AA-plus by S&P.
In the competitive arena, the Metropolitan Atlanta Rapid Transit Authority, Ga., will sell $247.73 million of refunding series 2016B sales tax revenue bonds, Third Indenture Series, on Thursday. The deal is rated Aa2 by Moody's.
MARTA last competitively sold comparable bonds on Nov. 5, 2015, when Wells Fargo Securities won $181.57 million of Series 2015B sales tax revenue bonds, Third Indenture Series with a TIC of 3.899%.
On Thursday, the Maryland University System is competitively selling two issues totaling $201.33 million. The deals consist of $140 million of Series 2016A auxiliary facility and tuition revenue bonds and $61.33 million of Refunding Series 2016B auxiliary facility and tuition revenue bonds. Both sales are rated Aa2 by Moody's and AA-plus by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $980.4 million to $9.59 billion on Monday. The total is comprised of $3.33 billion of competitive sales and $6.26 billion of negotiated deals.
Secondary Market
Treasuries were mostly unchanged on Monday morning. The yield on the two-year Treasury rose to 0.79% from 0.77% on Friday, while the 10-year Treasury yield was flat at 1.93% and the 30-year Treasury bond yield was unchanged at 2.75%.
Municipal bonds finished stronger on Friday. The yield on the 10-year benchmark muni general obligation fell four basis points to 1.71% from 1.75% on Thursday, while the 30-year muni yield dropped two basis points to 2.75% from 2.77%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Friday at 88.7% compared to 88.2% on Thursday, while the 30-year muni to Treasury ratio stood at 99.8% versus 99.3%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 34,288 trades on Friday on volume of $8.297 billion.
Yvette Shields contributed to this report
