Prices of top-quality municipal bonds were weaker at mid-session, traders said, with yields on some maturities rising by as much as three basis points.
Municipal bond market traders await the roughly $5 billion in new issuance this week, which is headlined by the Kansas Development Finance Authority's $1 billion pension deal.
Secondary Market
The yield on the 10-year benchmark muni general obligation on Monday was as much as two basis points higher from 2.21% on Friday, while the yield on the 30-year GO was one to three basis points higher from 3.08%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were mostly lower on Monday, with the yield on the two-year Treasury note unchanged from 0.72% on Friday, while the 10-year yield rose to 2.22% from 2.17% and the 30-year yield increased to 2.89% from 2.82%.
The 10-year muni to Treasury ratio was calculated on Friday at 101.8% versus 100.4% on Thursday, while the 30-year muni to Treasury ratio stood at 109.0% compared to 107.3%, according to MMD.
Primary Market
Municipal volume is estimated to total roughly $5 billion this week, with about a dozen negotiated deals and no competitive sales larger than $100 million on the calendar.
The biggest deal of the week is a $1 billion offering from the Kansas Development Finance Authority. The deal, to be by priced by Bank of America Merrill Lynch on Wednesday, consists of Series 2015H taxable revenue bonds. The issue is rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's.
The KDFA is ready to go to market with the $1 billion of pension obligation bond sale that drew a heated debate in the longest legislative session in the state's history.
In the first large issue of the week, Wells Fargo is scheduled to price MEAG's $183.76 million of Georgia Power Project J revenue bonds on Tuesday. The bonds are rated A2 by Moody's and A-plus by S&P and Fitch.
Goldman is also scheduled to price the Los Angeles County Public Works Authority, Calif.'s $218.155 million of lease revenue refunding bonds on Wednesday. The issue, which consists of Series B tax-exempts and Series C taxables, is rated A1 by Moody's, AA by S&P and A-plus by Fitch.
Morgan Stanley will price the state of Michigan's $129.31 million of Series 2015A tax-exempt general obligation environmental program refunding bonds on Wednesday. The issue is rated Aa1 by Moody's and AA-minus by S&P and Fitch.
Wells Fargo Securities is also scheduled to price Charlotte, N.C.'s $475 million of water and sewer revenue bonds on Thursday. The issue is rated triple-A by Moody's, S&P and Fitch Ratings.
Goldman, Sachs will price the $381.705 million of hospital refunding revenue bonds, Series 2015 for the Children's Hospital Obligated Group Issue in Washington, D.C. on Thursday.
Prior Week's Actively Traded Issues by Sector
Revenue bonds comprised 54.57% of new issuance in the week ended Aug. 7, up from 52.60% in the previous week, according to Markit. General obligation bonds comprised 36.56% of total issuance, down from 38.08%, while taxable bonds made up 8.87%, down from 9.32%.
Some of the most actively traded issues in the week ended Aug. 7 were in Colorado, New York and Connecticut, according to Markit.
In the revenue bond sector, the Colorado Regional Transportation District 4s of 2040 were traded 56 times. In the GO bond sector, the New York City 5s of 2026 were traded 37 times. And in the taxable bond sector, The Connecticut 2.5s of 2020 were traded 17 times, Markit said.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 32,630 trades on Friday on volume of $6.426 billion.
The most active bond, based on the number of trades, was the Louisiana Public Facilities Authority Series 2015 revenue refunding bonds for the 19th Judicial District Court Building project 4 1/2s of 2047, which traded 200 times at an average price of 100.924, an average yield of 4.375%. The bonds were initially priced at 96.711 to yield 4.70%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar was up $735 million to $8.55 billion on Monday. The total is comprised of $2.67 billion competitive sales and $5.88 billion of negotiated deals.
