Municipal bond buyers are eagerly awaiting the biggest new issue calendar of the year, as almost $10 billion of supply is slated to hit the market this week.

This week’s volume is estimated at $9.9 billion, which is made up of $5.90 billion of negotiated deals and $3.99 billion of competitive sales.

Primary market
According to one New York trader, this week’s new deals are expected to lend positive support to munis.

“It’s nothing that can disrupt the market, but actually will help the market,” he said, pointing to the Pennsylvania general obligation bond sale and the Grand Parkway Authority revenue offering in Texas. “When you have positive technicals and bigger deals, that usually brings price discovery,” the trader said.

On Tuesday, the New York City Transitional Finance Authority will be competitively selling $1.1 billion of Fiscal 2018 Series C tax-exempt and taxable fixed rate bonds in five sales.

The deals consist of $122.09 million Subseries C-1 tax-exempt bonds; $329.22 million of Subseries C-2 tax-exempt bonds; $398.9 million of Subseries C-3 tax-exempt bonds; $137.4 million of Subseries C-4 taxable bonds; and $112.6 million of Subseries C-5 taxable bonds.

Also on Tuesday, Boston is competitively selling $150 million of Series 2018A general obligation bonds.

The North Dakota Public Finance Authority is competitively selling $131.09 million of Series 2018A state revolving fund bonds.

And Nevada is competitively selling $116.76 million of Series 2018 highway improvement motor vehicle fuel tax revenue bonds.

Jefferies is expected to price the Pennsylvania Turnpike Commission’s $444.81 million of oil franchise tax bonds on Tuesday.

In the competitive arena on Wednesday, Pennsylvania will competitively sell $1.25 billion of its First Series of 2018 general obligation bonds. Proceeds will be used to finance various capital projects.

In the negotiated sector on Wednesday, Citigroup is expected to price the city and county of San Francisco Airport Commission’s $914 million of second series revenue and revenue refunding bonds.

And Goldman Sachs is set to price the Grand Parkway Transportation Corp.’s $911 million of subordinate tier toll revenue bonds and $610 million of bond anticipation notes on Wednesday.

Prior week's top underwriters
The top municipal bond underwriters of last week included Bank of America Merrill Lynch, Raymond James & Associates, Morgan Stanley, Citigroup and JPMorgan Securities, according to Thomson Reuters data.

In the week of May 6 to May 12, BAML underwrote $1.61 billion, Raymond James $726.2 million, Morgan Stanley $711.9 million, Citi $682.4 million and JPMorgan $579.9 million.

Bond Buyer 30-day visible supply at $13.31B
The Bond Buyer's 30-day visible supply calendar increased $332.1 million to $13.31 billion on Monday. The total is comprised of $6.80 billion of competitive sales and $6.51 billion of negotiated deals.

Secondary market
Municipal bonds were mixed on Monday, according to a midday read of the MBIS benchmark scale.

Benchmark muni yields fell as much as one basis point in the one- to seven-year, 12-year and 17- to 30-year maturities and rose less than a basis point in the eight- to 11-year and 13- to 16-year maturities . High-grade munis were also mixed, with yields calculated on MBIS’ AAA scale falling by as much as one basis point in the one- to 12-year and 18- to 30-year maturities and gaining less than a basis point in the 13- to 17-year maturities.

After displaying steady and minimal outperformance last week and some evidence of a reallocation of assets on the short end of the yield curve, this pattern also led to a steepening of the yield curve on the long end, the New York trader said on Friday.

“It was a flat line week with steady distribution of new issue product and maybe a little tighter in the secondary market but nothing directionally different.”

He noted that the market demonstrated positive technicals last week.

“We’re coming out of the backside a little firmer in munis, outperforming Treasuries this week,” he said. “Most of the outperformance is actually shifted to the front end of the curve with some speculation of a reallocation of money coming out of the equities and being put in fixed income.”

Municipals were weaker on Monday according to Municipal Market Data’s AAA benchmark scale, which showed yields rising as much as one basis point in the 10-year general obligation muni and gaining as much as one basis point in the 30-year muni maturity.

Treasury bonds were slightly weaker as stocks rose.

On Friday, the 10-year muni-to-Treasury ratio was calculated at 82.2% while the 30-year muni-to-Treasury ratio stood at 95.0%, according to MMD.

Previous session's activity
The Municipal Securities Rulemaking Board reported 36,321 trades on Friday on volume of $9.34 billion.

California, New York and Texas were the states with the most trades, with the Golden State taking 17.45% of the market, the Empire State taking 14.814% and the Lone Star State taking 9.481%.

Prior week's actively traded issues
Revenue bonds comprised 56.11% of new issuance in the week ended May 11, down from 56.57% in the previous week, according to Markit. General obligation bonds made up 38.12% of total issuance, up from 37.99%, while taxable bonds accounted for 5.77%, up from 5.44% a week earlier.

Some of the most actively traded bonds by type were from Kansas, Virginia and New York issuers.

In the GO bond sector, the Wyandotte USD No. 203, Kan., 4s of 2048 traded 27 times. In the revenue bond sector, the Norfolk Economic Development Authority, Va., 4s of 2048 traded 57 times. And in the taxable bond sector, the DASNY 4.85s of 2048 traded 45 times.

Treasury auctions discount bills
Tender rates for the Treasury Department's latest 91-day and 182-day discount bills were higher, as the $48 billion of three-months incurred a 1.890% high rate, up from 1.840% the prior week, and the $42 billion of six-months incurred a 2.035% high rate, up from 2.000% the week before.

Coupon equivalents were 1.925% and 2.085%, respectively. The price for the 91s was 99.522250 and that for the 182s was 98.971194.

The median bid on the 91s was 1.865%. The low bid was 1.835%. Tenders at the high rate were allotted 54.91%. The bid-to-cover ratio was 3.04.

The median bid for the 182s was 2.010%. The low bid was 1.980%. Tenders at the high rate were allotted 54.11%. The bid-to-cover ratio was 2.98.

Treasury to sell $45B 4-week bills
The Treasury Department said it will sell $45 billion of four-week discount bills Tuesday. There are currently $89.999 billion of four-week bills outstanding.

Gary Siegel contributed to this report.

Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation. Click here for a brief tour of the Workstation, or contact Vanessa Kim at 212-803-8474 for more information.

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Chip Barnett

Chip Barnett

Chip Barnett is a journalist with more than 40 years of experience. Barnett is currently Senior Market Reporter for The Bond Buyer.
Christine Albano

Christine Albano

Christine Albano is a reporter in the Investor’s & Investing beat, which she has covered for the past two decades. She has a wide range of buy side sources in the municipal market.