The municipal bond market was awaiting some large new deals to hit the market on Tuesday, led by issuers in New York and California.
Secondary Market
Treasury prices were lower on Tuesday, with the yield on the two-year Treasury up to 0.62% from 0.60% on Monday, while the 10-year yield rose to 2.06% from 2.02% and the 30-year yield increased to 2.91% from 2.88%.
The yield on the 10-year benchmark muni general obligation was steady on Monday from 2.02% on Friday, while the yield on the 30-year GO was flat from 3.07%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Monday at 99.7% versus 98.6% on Friday, while the 30-year muni to Treasury ratio stood at 106.6% compared to 106.6%, according to MMD.
Primary Market
The New York City Transitional Finance Authority is coming to market with the week’s biggest offering -- $1 billion of bonds altogether, consisting of a big negotiated deal and two smaller competitive sales.
JPMorgan Securities is set for the second day of a two-day retail order period for the TFA’s $749.28 million of future tax secured subordinate bonds. The deal is scheduled to be priced for institutions on Wednesday.
On Monday, the $350 million of Fiscal 2016 Subseries B-1 bonds were priced for retail as 5s to yield 3.19% in 2035 and as 3 5/8s to yield 3.67% in 2039; no retail orders were taken in the 2028-2034 or 2036-2038 maturities.
The $346.94 million of Fiscal 2016 Series C bonds were priced to yield from 0.83% with a 5% coupon in 2018 to 3.13% with a 3% coupon in 2030; a 2017 maturity was offered as a sealed bid.
The $52.34 million of Fiscal 2016 Series D bonds were priced to yield from 0.83% with a 3% coupon in 2018 to 3.13% with a 3% coupon in 2030; the 2016 and 2017 maturities were offered as sealed bids.
These bonds are rated Aa1 by Moody’s Investors Service and triple-A by both Standard & Poor’s and Fitch Ratings.
On Wednesday, the TFA will offer $250 million of bonds in two competitive sales consisting of $198.32 million of Series B, Subseries B-2 taxable bonds and $51.69 million of Series B, Subseries B-3 taxable bonds. These bonds are rated triple-A by Fitch.
Since 1995, the TFA has issued about $39.32 billion of debt. The years of 2011 and 2012 saw the most issuance with $6.05 billion and $5.66 billion, respectively. The lowest years of issuance were in 2006 and 2008, when the authority sold $1.45 billion and $1.32 billion of bonds, respectively.
On Tuesday, the state of California will be selling $960.96 million of various purpose general obligation and refunding bonds in three separate competitive sales. All three sales are rated Aa3 by Moody’s, AA-minus by S&P and A-plus by Fitch.
The state of Ohio will also be in the competitive arena with the sale of $300 million Series 2015C higher education GOs. The issue is rated Aa1 by Moody’s and AA-plus by S&P and Fitch.
Also on Tuesday, RBC Capital Markets is expected to price the Tacoma School District No. 10, Pierce County, Wash.’s $370 million of Series 2015 unlimited tax GO and refunding bonds. The issue is rated AA1 by Moody’s and AA-plus by S&P.
And BAML is set to price on Tuesday the South Carolina State Port Authority’s $288 million of Series 2015 revenue bonds, subject to the alternative minimum tax. The issue is rated A1 by Moody’s and A-plus by S&P.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 31,996 trades on Monday on volume of $4.20 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $1.64 billion to $12.67 billion on Tuesday. The total is comprised of $3.86 billion competitive sales and $8.81 billion of negotiated deals.
