Top quality municipal bonds were substantially stronger in early activity, according to traders, with yields on some maturities weakening by as much as five basis points.
The yield on the 10-year benchmark muni general obligation was two to four basis points weaker from 1.70% on Monday, while the 30-year muni yield was three to five basis points weaker from 2.68%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were also stronger on Tuesday. The yield on the two-year Treasury fell to 0.72% from 0.74% on Monday, while the 10-year Treasury yield dropped to 1.73% from 1.78% and the 30-year Treasury bond yield declined to 2.56% from 2.61%.
The 10-year muni to Treasury ratio was calculated on Monday at 95.7% compared with 95.0% on Friday, while the 30-year muni to Treasury ratio stood at 102.8% versus 102.3%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 35,473 trades on Monday on volume of $7.52 billion.
The Primary Market
Jefferies is set to offer the University of Connecticut’s $340.62 million of general obligation bonds to retail investors for a second day ahead of the institutional pricing on Wednesday.
The $259.43 million of Series 2016A GOs were priced on Monday for retail to yield from 1.09% with 4% and 5% coupons in a split 2019 maturity to 3.22% with a 4% coupon in 2036. No retail orders were taken in the 2028-2032 or 2034-2035 maturities. The 2017 and 2018 maturities were offered as sealed bids.
The $81.19 million of Series 2016A refunding GOs were priced for retail as 5s to yield from 1.09% in 2019 to 2.33% in 2027. The 2017 and 2018 maturities were offered as sealed bids.
The issue is rated Aa3 Moody’s Investors Service, AA by Standard & Poor’s and AA-minus by Fitch Ratings.
Since 2006, UConn has sold about $1.92 billion of bonds with the most issuance prior to this sale occurring in 2015 when it sold $254.8 million of bonds. The university did not come to market in 2008.
Citigroup is set to price the Tarrant County, Texas, Cultural Education Facilities Corp.’s $372 million of tax-exempt hospital revenue bonds for Baylor Scott & White Health for retail investors on Tuesday. The deal is part of a $912 million issue which also consists of $540 million of taxable corporate CUSIP bonds. The issue is slated to be priced for institutions on Wednesday. The bonds are rated Aa3 by Moody’s and AA-minus by S&P.
Stifel is expected to price the San Diego Unified School District, Calif.’s $150.72 million of Series 2016 SR-1 GO refunding bonds. The deal is rated Aa2 by Moody’s and triple-A by Fitch.
Citi is set to price Lubbock, Texas’ $124 million of GO refunding and tax and waterworks system surplus revenue certificates on Tuesday. The issue is rated Aa2 by Moody’s and AA-plus by S&P and Fitch.
Raymond James & Associates is set to price on Tuesday the Burleson Independent School District, Texas’ $121.42 million of unlimited tax refunding bonds backed by the Permanent School Fund guarantee program. The bonds are rated triple-A by Moody’s and S&P.
In the competitive arena on Tuesday, the city and county of San Francisco, Calif., will sell of $179.42 million of Series 2016C, D and E general obligation various purpose bonds. The deal is rated Aa1 by Moody’s and AA-plus by S&P and Fitch.
The Florida Department of Transportation will competitively sell $161.77 million of Series 2016A full faith and credit right of way acquisition and bridge construction refunding bonds. The bonds are rated Aa1 by Moody’s and triple-A by S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $502.3 million to $10.47 billion on Tuesday. The total is comprised of $2.55 billion of competitive sales and $7.92 billion of negotiated deals.
