Municipal bonds traders were awaiting the second leg of this week's hefty new issue calendar to come to market on Wednesday.
Secondary Market
Treasury prices were mostly lower on Wednesday morning. The two-year Treasury yield rose to 0.94% from 0.90% on Tuesday while the 10-year Treasury yield was higher at 2.17% from 2.15% and the 30-year remained flat at 2.92%.
Top-rated municipal bond prices were higher on Tuesday. The yield on the 10-year benchmark muni general obligation fell four basis points to 1.98% from 2.02% on Monday, while the 30-year yield dropped four basis points to 2.92% from 2.96%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Tuesday at 91.9% from 91.1% on Monday, while the 30-year muni to Treasury ratio stood at 100.1% compared to 99.0%, according to MMD.
Primary Market
In the primary, Morgan Stanley is expected to price the Kansas Department of Transportation's $400 million of Series 2015B highway revenue bonds on Wednesday. The deal is rated Aa2 by Moody's, triple-A by Standard & Poor's and AA-plus by Fitch.
Since 2007, the Kansas DOT has issued about $2.2 billion of debt. The most issuance took place in 2012 and 2014 when the department sold $496 million and $463 million, respectively. The DOT did not come to market in 2011 and 2013. During the same time period, they have issued bonds on average 1.4 times per year.
Also on tap for Wednesday, the Maryland Department of Transportation will competitively sell $325 million of Series 2015, Third Issue, consolidated transportation bonds. The issue is rated Aa1 by Moody's, triple-A by S&P and AA-plus by Fitch.
In the short-term competitive arena, the New York Metropolitan Transportation Agency brings $700 million of bond anticipation notes in six sales of $12 million each and one sale of $628 million on Wednesday. The BANs are rated MIG-1 by Moody's, SP-1-plus by S&P and F-1 by Fitch.
And The District of Columbia will competitively sell $250 million of fiscal year 2016 GO tax revenue anticipation notes on Wednesday. The TRANs are rated MIG-1 by Moody's, SP-1-plus by S&P and F-1-plus by Fitch.
Since 2005, the District of Columbia has issued about $5.19 billion of note debt. The most issuance took place in 2010 and 2011 when D.C. sold $700 million and $820 million of notes, respectively. The nation's capital saw low years in 2005 when it issued $250 million and in 2006 and 2007, when it issued $300 million. On average during the same time period, it has come to market with notes an average of 1.5 times per year.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $1.90 billion to $9.54 billion on Wednesday. The total is comprised of $3.70 billion competitive sales and $5.84 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 41,020 trades on Tuesday on volume of $9.845 million.
