Municipal bond traders are ready to see more big new issues hit the market on Tuesday, topped by over $1.5 billion coming from New York issuers alone.
Top quality munis are stronger by as many as three basis points on some maturities early this morning, according to traders.
Secondary Market
On Tuesday morning, the yield on the 10-year benchmark muni general obligation was down by as many as two basis points from 1.99% on Monday, while the 30-year yield was one to three basis points lower from 2.92%, according to an early morning read of Municipal Market Data's triple-A scale.
Treasury yields on Tuesday morning were lower. The yield on the two-year Treasury fell to 0.92% from 0.93% on Monday while the 10-year Treasury yield decreased to 2.20% from 2.22% and the 30-year lower to 2.94% from 2.95%.
The 10-year muni to Treasury ratio was calculated on Monday at 89.6% from 88.4% on Friday, while the 30-year muni to Treasury ratio stood at 98.3% compared to 99.0%, according to MMD.
Primary Market
On Tuesday, the Empire State Development Corp. will offer about $1.14 billion of personal income tax revenue bonds in four separate competitive sales for the New York State Urban Development Corp.
The offering consists of $404.73 million of Series 2015A Group B bonds; $386.64 million of Series 2015A Group B bonds; $237.56 million of Series 2015B taxable bonds; and $114.66 million of Series 2015A Group C bonds. All four PIT sales are rated Aa1 by Moody's.
The last time the ESDC competitively sold comparable tax-exempt bonds was on Dec. 2, 2014, when JPMorgan won $414.86 million of Series 2014A Group A PIT bonds with a TIC of 1.82%; ESDC last sold comparable taxable bonds on Dec. 2, 2014, when Goldman Sachs won $370.82 million of Series 2014B bonds.
Since 2005, the Empire State Development Corp. has issued about $15.03 billion of debt. The most issuance took place in 2009 and 2013 when the ESDC sold $2.55 billion and $3.28 billion of bonds, respectively. The low years occurred in 2006 and 2012, when it did not come to market at all. During the past 10 years, it has come to market with bonds an average of 4.1 times per year.
Wells Fargo Securities is set to sell the New York City Housing Development Corp.'s $129.33 million of Series H&I multi-family housing revenue sustainable neighborhood bonds. This issue, which has a mandatory tender maturity of 2020, is rated Aa2 by Moody's and AA-plus by S&P.
Additionally, JPMorgan is slated to price the New York City HDC's Series 2015 G fixed-rate multi-family housing revenue sustainable neighborhood bonds. The issue is also rated Aa2 by Moody's and AA-plus by S&P.
Also in the negotiated sector on Tuesday, Citi is expected to price the Indiana Municipal Power Agency's $385 million of power supply system revenue bonds. The deal is rated A1 by Moody's and A-plus by both S&P and Fitch.
RBC Capital Markets is expected to price the Illinois State Toll Highway Authority's $340 million of senior revenue refunding bonds. The deal is rated AA-minus by Fitch.
Las Vegas, Nev., will competitively sell $164.43 million of Series 2015C GOLT City Hall bonds, additionally secured by pledged revenues. The issue is rated Aa1 by Moody's and AA by S&P.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 32,718 trades on Monday on volume of $5.073 million.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $333.2 million to $9.65 billion on Tuesday. The total is comprised of $3.17 billion competitive sales and $6.49 billion of negotiated deals.
