Municipal bond traders are prepping on Monday for a busy week with more than $10 billion of new supply slated to hit the screens.
Secondary Market
Treasuries were narrowly mixed on Monday. The yield on the two-year Treasury rose to 0.81% from 0.80% on Friday, while the 10-year Treasury yield fell to 1.75% from 1.77% and the 30-year Treasury bond yield decreased to 2.62% from 2.64%.
On Friday, top rated municipals were lower. The yield on the 10-year benchmark muni general obligation rose five basis points to 1.76% from 1.71% on Thursday, while the 30-year muni yield was three basis points higher at 2.80% 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 99.8% compared to 100.9% on Thursday, while the 30-year muni to Treasury ratio stood at 106.2% versus 107.7%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 31,992 trades on Friday on volume of $8.23 billion.
Primary Market
Municipal volume is estimated at $10.10 billion, consisting of $8.79 billion of negotiated deals and $1.31 billion of competitive sales.
Issuers in California will be coming to market with a raft of sales, led off by the biggest deal of the week – a $1.2 billion general obligation and refunding offering from the Los Angeles Unified School District to be priced by Citigroup on Tuesday.
Proceeds of the sale will be used to finance school facilities projects and refund some portions of outstanding bonds. The deal is rated Aa2 by Moody's Investors Service, AAA by Fitch Ratings and AA-plus by Kroll Bond Rating Agency.
Also from California, Wells Fargo Securities is expected to price the San Diego Public Facilities Financing Authority's $401.49 million of Series 2016A senior sewer revenue refunding bonds on Wednesday. The deal is rated AA by Standard & Poor's and Fitch.
Barclays Capital is set to price the California Statewide Communities Development Authority's $282.74 million of Series 2016 student housing refunding revue bonds for the UC Irvine Campus Apartments. The deal is rated Baa1 by Moody's.
JPMorgan Securities is expected to price the Los Angeles County Public Works Financing Authority's $246.26 million of Series 2016D lease revenue bonds. The bonds are rated A1 by Moody's, AA by S&P and AA-minus by Fitch.
New York issuers are also well represented on the calendar.
Wells Fargo Securities is set to sell the New York Metropolitan Transportation Authority's $500 million of Series 2016A dedicated tax fund refunding bonds on Wednesday. The deal is rated AA by S&P and Fitch.
Barclays Capital is expected to sell New York's Utility Debt Securitization Authority's $381.73 million of Series 2016A tax-exempt restructuring bonds on Tuesday. The deal is rated triple-A by Moody's, S&P and Fitch. The offering is part of a $2.5 billion three-phase plan to refinance the triple-B-rated bonds from the Long Island Power Authority with lower cost triple-A-rated bonds from the UDSA.
Citi will price the New York City Municipal Water Authority's $335 million of water and sewer system second general resolution revenue bonds on Tuesday. The deal is rated Aa1 by Moody's, AAA by S&P and AA-plus by Fitch.
Also on tap, Citi is set to price the Kentucky State Property and Buildings Commission's $668 million of Project No. 112 revenue bonds on Tuesday. The deal is rated Aa3 by Moody's, A by S&P and A-plus by Fitch.
Barclays Capital is expected to sell Ohio State University's $600 million of taxable Series 2016A general receipts bonds. The deal is rated Aa1 by Moody's and AA by S&P and Fitch.
JPMorgan is set to price the Orange County School Board, Fla.'s $218.87 million of Series 2016B and C bonds. The issue is rated Aa2 by Moody's and AA by Fitch.
Massachusetts will be coming to market with a $1.1 billion general obligation bond sale.
Bank of America Merrill Lynch is set to price the $600 million of new money consolidated loan of 2016 Series A bonds and the $501.34 million of 2016 Series A refunding bonds on Thursday after a one-day retail order period.
Proceeds of the sale will be used to finance state capital projects and will advance refund some portions of outstanding GOs. Massachusetts currently estimates savings of $73 million on a present value basis and almost $100 million on a gross basis.
The issue is rated Aa2 by Moody's, and AA-plus by Standard & Poor's and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $226.1 million to $12.50 billion on Monday. The total is comprised of $2.31 billion of competitive sales and $10.19 billion of negotiated deals.
The Week's Most Actively Traded Issues
Revenue bonds comprised 50.72% of new issuance in the week ended Feb. 26, down from 52.98% in the previous week, according to Markit. General obligation bonds comprised 41.06% of total issuance, up from 40.06%, while taxable bonds made up 8.22%, up from 6.96%.
Some of the most actively traded issues by type in the week ended Feb. 26 were in New York, Alabama and Florida.
In the GO bond sector, the New York City 3s of 2034 traded 58 times. In the revenue bond sector, the Lower Alabama Gas District 5s of 2046 traded 84 times. And in the taxable bond sector, the Florida Administrative Finance Corp. 2.163s of 2019 traded 82 times, according to
