The municipal bond market is set to see most of the week's new issues hit the screens on Tuesday, as traders clear the decks ahead of the Federal Reserve's monetary policy decision.
Munis were lower on Tuesday morning according to traders, as yields on some maturities were as much as four basis points higher.
Secondary Market
Municipal bonds were weaker on Tuesday morning. The yield on the 10-year benchmark muni general obligation was up by as many as three basis points from 1.95% on Monday, while the 30-year yield was as many as four basis points higher from 2.84% on Monday, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasury bonds slumped on Tuesday morning as the yield on the two-year rose to 0.98% from 0.94% on Monday while the 10-year yield increased to 2.28% from 2.23% and the 30-year Treasury jumped to 3.01% from 2.96%.
The 10-year muni to Treasury ratio was calculated on Monday at 87.4% compared to 89.9% on Friday, while the 30-year muni to Treasury ratio stood at 95.9% compared to 97.3%, according to MMD.
Primary Market
Tuesday will be the big day in the primary market this week as underwriters and dealers seek to wrap up business before the Fed announcement on Wednesday.
The Federal Open Market Committee is meeting on Tuesday and Wednesday, with expectations of a 25 basis point increase in the federal funds rate target announced after the meeting.
Jacksonville, Fla., will competitively sell $200.27 million of transportation refunding revenue bonds. The deal is rated A1 by Moody's and AA-minus by Standard & Poor's and Fitch.
Since 2005, Jacksonville has issued 3.12 billion of debt. The years of 2008 and 2012 saw the most issuance with $570 million and $952 million, respectively. The years of 2005 and 2006 were low years, when they issued $45 million and $69 million, respectively. The River City has been to market an average of 3.3 times per year during the same time period.
The last time the city competitively sold comparable bonds was on Sept. 5, 2007, when Merrill Lynch won $100.68 million of Series 2007 transportation revenue bonds with a true interest cost of 4.75%.
RBC Capital Markets is expected to price the Spring Independent School District in Harris County, Texas' $137.97 million of Series 2015 unlimited tax refunding bonds on Tuesday. The deal is wrapped by Permanent School Fund Guarantee Program and is rated triple-A by both Moody's and S&P.
Barclays Capital is slated to price Utah Housing Corp.'s $100 million of Series 2015D single-family mortgage bonds on Thursday. The bonds are rated Aa3 by Moody's.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 32,017 trades on Monday on volume of $5.001 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $57.3 million to $4.38 billion on Tuesday. The total is comprised of $1.29 million competitive sales and $3.09 billion of negotiated deals.
