Munis remain weaker as new deals sell

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Municipals remained weaker on Wednesday as more deals came to market, which included a large competitive offering from a Volunteer State issuer.

Primary market
Wilson County, Tenn., sold $107 million of Series 2018 unlimited tax general obligation school bonds.

Citigroup won the deal with a true interest cost of 3.4642%.

Proceeds of the sale will be used to finance various school improvements. The financial advisor is Stephens; the bond counsel is Bass Berry.

The deal is rated AA-plus by S&P Global Ratings.

Since 2008, the county has sold almost $500 million of bonds, with the most issuance occurring in 2012 when it sold $108.1 million. It did not come to market in 2011.
Wednesday’s bond sale

Click here for the Wilson County deal

Bond Buyer 30-day visible supply at $5.13B
The Bond Buyer's 30-day visible supply calendar decreased $3.42 billion to $5.13 billion for Wednesday. The total is comprised of $2.17 billion of competitive sales and $2.97 billion of negotiated deals.

Secondary market
Municipal bonds were weaker on Wednesday, according to a midday of the MBIS benchmark scale. Benchmark muni yields rose less than one basis point in the one- to 30-year maturities.

High-grade munis were also weaker, with yields calculated on MBIS' AAA scale rising less than one basis point across the curve.

And municipals were weaker on Municipal Market Data’s AAA benchmark scale, which showed the yield on the 10-year muni general obligation and the yield on 30-year muni maturity rising as much as one basis point.

Treasury bonds were weaker as stock prices traded mixed.

On Tuesday, the 10-year muni-to-Treasury ratio was calculated at 84.7% while the 30-year muni-to-Treasury ratio stood at 100.8%, according to MMD. The muni-to-Treasury ratio compares the yield of tax-exempt municipal bonds with the yield of taxable U.S. Treasury with comparable maturities. If the muni/Treasury ratio is above 100%, munis are yielding more than Treasury; if it is below 100%, munis are yielding less.

Previous session's activity
The Municipal Securities Rulemaking Board reported 43,241 trades on Tuesday on volume of $11.26 billion.

California, New York and Texas were the municipalities with the most trades, with Golden State taking 16.86% of the market, the Empire State taking 12.048% and the Lone Star State taking 10.311%.

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 Ziad Saba at 212-803-6079 for more information.

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