Prices of top-rated municipal bonds were flat for a second session Monday, traders said, as the market prepared for this week's estimated volume of almost $9 billion.
Secondary Market
The yield on the 10-year benchmark muni general obligation was unchanged from Friday's 1.97%, while the yield on the 30-year GO was also the same at 2.84%, according to the final read of Municipal Market Data's triple-A scale.
On Monday, The 10-year muni to Treasury ratio was calculated at 101.8% versus 101.2% on Friday, while the 30-year muni to Treasury ratio stood at 110.0% compared to 110.2%.
Treasury prices were mixed as the yield on the two-year Treasury note fell to 0.54% from 0.56% on Friday, while the 10-year yield dropped to 1.94% from 1.95% and the 30-year yield rose to 2.58% from 2.53%.
Primary Market
Municipal market participants are looking forward to a healthy $8.84 billion of estimated issuance this week, with $6.60 billion of negotiated deals and $2.24 of competitives.
The action has started quickly, as RBC Capital Markets priced the Missouri Health and Educational Facilities Authority's $150 million of health facility bonds for the BJC Health System. The bonds were priced as a bullet maturity as 4s at par in 2045. The deal is rated AA2 by Moody's and AA by S&P.
The largest issue this week belongs to the Port Authority of New York and New Jersey, as it plans to market $775 million of consolidated bonds on Wednesday after a one-day retail order period on Tuesday. The deal is structured to consist of 188th Series alternative minimum tax (AMT) bonds and 189th Series non-AMT bonds. The issue is rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings.
Loop Capital Markets LLC is scheduled to price the New York City Transitional Finance Authority's $650 million of future tax secured subordinate bonds, Fiscal 2015 Subseries E-1 on Thursday after a two-day order period starting on Tuesday. The deal is currently structured as serials running from 2017 to 2035 with term bonds in 2040 and 2042. The bonds are rated Aa1 by Moody's and triple-A by S&P and Fitch.
RBC is expected to price the Michigan finance authority's $214.195 million of hospital revenue and refunding bonds for the sparrow obligated group. The deal is rated A1 by Moody's and A-plus by S&P. Citigroup is expected to price Fort Bend county Texas's $143 million of unlimited tax road and refunding and limited tax refunding bonds. The bonds are expected to mature serially from 2016-20445 and is rated Aa1 by Moody's.
Top Traded Munis by Sector
Muni bonds from issuers in Puerto Rico and New York were the most actively traded bonds by market sector in the week ended April 10, according to data released by Markit.
Broken down by market sector, revenue bonds comprised 53.99% of new issuance, down from 54.53% in the prior week. General obligation bonds comprised 38.24% of total issuance, up from 37.65%, while taxable bonds made up 7.77%, down from 7.82%.
In the revenue bond sector, California's Golden State Tobacco Securitization Corp. 5s of 2045 were traded 109 times, according to Markit.
On the bid side, the Puerto Rico Aqueduct and Sewer Authority revenue bonds 5 1/4s of 2042 were quoted by 10 unique dealers. On the ask side, the New York City Municipal Water Finance Authority's water and sewer system revenue 5s of 2039 were quoted by 15 dealers. And among two-sided quotes, the Puerto Rico commonwealth 8s of 2035 were quoted by eight dealers, Markit said.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.449 billion to $13.260 billion on Monday. The total is comprised of $4.248 billion competitive sales and $9.012 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 36,382 trades on Friday on volume of $8.805 billion. Most active, based on the number of trades, was the commonwealth of Pennsylvania financing authority revenue bonds, Series 2015 tax exempt series B-1 5s of 2025, which traded 150 times at an average price of 1118.76 with an average yield of 2.85%. The bonds were originally priced at 118.76 to yield 2.85%.
