The municipal bond market is looking ahead to a holiday-shortened trading week, with most of the action jammed into Tuesday and Wednesday.
New issue supply is forecast at $5.69 million, with the calendar comprised of $3.23 billion of negotiated deals and $2.46 billion of competitive sales.
Headlining the slate is the $1.1 billion of negotiated and competitive bond offerings from the New York City Transitional Finance Authority.
On Friday, RBC Capital Markets held the first of a two-day retail order period on the $840 million of future tax secured subordinated bonds ahead of the institutional pricing on Tuesday.
The $800 million of Fiscal 2017 Series E Subseries E-1 tax-exempt bonds were priced for retail to yield from 1.19% with a 4% coupon in 2020 to 3.71% with a 3.625% coupon in 2045. No retail orders were taken in the 2032, 2035-2036, 2039 or 2041-2043 maturities. A 2019 maturity was offered as sealed bid.
The $40 million of Fiscal 1999 Series A Subseries A-2 tax-exempt bonds were priced for retail as a remarketing to yield 1.15% with 4% and 5% coupon in a split 2019 maturity.
The bonds are rated Aa1 by Moody’s Investors Service and AAA by S&P Global Ratings and Fitch Ratings.
The NYC TFA will competitively sell $300 million of taxable bonds in two separate sales on Tuesday consisting of $234.21 million of future tax secured subordinate bonds, Fiscal 2017, Subseries E-2, and $65.79 million of future tax secured subordinate bonds, Fiscal 2017, subseries E-3.
JPMorgan Securities is slated to price Energy Northwest’s $592 million of electric revenue refunding bonds on Tuesday.
The deal is rated Aa1 by Moody’s, AA-minus by S&P and AA by Fitch.
In the competitive arena, California is set to sell $635.59 million of various purpose general obligation refunding bonds on Wednesday.
The deal is rated Aa3 by Moody’s and AA-minus by S&P and Fitch.
The Golden State is the top municipal issuer through the first quarter of the year, having issued $16.48 billion in the first quarter of 2017.
Bond Buyer visible supply
The Bond Buyer's 30-day visible supply calendar increased $624.9 million to $11.37 billion on Monday. The total is comprised of $5.51 billion of competitive sales and $5.86 billion of negotiated deals.
U.S. Treasuries were little changed on Monday. The yield on the two-year Treasury was flat from 1.28% on Friday, while the 10-year Treasury yield was steady from 2.37%, and the yield on the 30-year Treasury bond decreased to 3.99% from 3.00%.
Municipal bonds finished stronger on Friday. The yield on the 10-year benchmark muni general obligation fell two basis points to 2.17% from 2.19% on Thursday, while the 30-year GO yield dropped two basis points to 2.97% from 2.99%, according to the final read of Municipal Market Data's triple-A scale.
On Friday, the 10-year muni to Treasury ratio was calculated at 91.4% compared to 93.5% on Thursday, while the 30-year muni to Treasury ratio stood at 99.1%, versus 100.0%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 34,570 trades on Friday on volume of $12.28 billion.
Prior week's actively traded issues
Revenue bonds comprised 58.13% of new issuance in the week ended April 7, down from 58.21% in the previous week, according to Markit.
General obligation bonds comprised 36.26% of total issuance, down from 36.44%, while taxable bonds made up 5.61%, up from 5.35%.
Some of the most actively traded issues by type were from New York, California and Michigan.
In the GO bond sector, the Suffolk County, N.Y., 2.25s of 2018 were traded 31 times. In the revenue bond sector, the California Golden State Tobacco Securitization Corp. 5s of 2028 were traded 37 times. And in the taxable bond sector, the Lanse Creuse Public Schools, Mich., 2.678s of 2022 were traded 21 times.
Previous Week's Top Underwriters
The top negotiated and competitive underwriters of last week included Bank of America Merrill Lynch, Citigroup, RBC Capital Markets, Goldman Sachs, and Stifel, according to Thomson Reuters data.
In the week of April 2 to April 8, BAML underwrote $2.01 billion, Citi $1.54 billion, RBC $604.8 million, Goldman $587.9 million and Stifel $364.3 million.