Municipal bonds held in to finish little changed on Monday as the market eyed this week’s new issue calendar, topped up by the return of Illinois with a multi-billion dollar bond offering.

Barclays Capital is expected to price Land of Lincoln’s $4.5 billion Series of November 2017D general obligation bonds on Wednesday in a deal that aims to pay off some of the state’s overdue bills.

The deal is rated Baa3 by Moody’s Investors Service, BBB-minus by S&P Global Ratings and BBB by Fitch Ratings. Moody’s and Fitch have negative outlooks on the state’s credit while S&P maintains a stable outlook.

A premarketing scale that was circulating last Friday showed yields ranging from 115 basis points above the interpolated Municipal Market Data scale in 2020 to 170 basis points above the scale in 2028; the highest yields were seen in the 2024-2027 maturities, which came in at 175 basis points above the scale.

On Monday, the Illinois spread above the MMD triple-A scale was calculated at 115 basis points in 2020 and 170 basis points in 2028, according to MMD.

Secondary market
The yield on the 10-year benchmark muni general obligation was unchanged from 1.95% on Friday, while the 30-year GO yield held at 2.74%, according to the final read of Municipal Market Data's triple-A scale.

U.S. Treasuries were little changed on Monday. The yield on the two-year Treasury dipped to 1.57% from 1.58%, the 10-year Treasury yield stayed at 2.38% and yield on the 30-year Treasury bond was steady from 2.89%.

On Monday, the 10-year muni-to-Treasury ratio was calculated at 82.1% compared with 81.9% on Friday, while the 30-year muni-to-Treasury ratio stood at 94.9% versus 94.7%, according to MMD.

AP-MBIS 10-year muni at 2.281%, 30-year at 2.850%
The Associated Press-MBIS municipal non-callable 5% GO benchmark scale reflected some trading weakness on Monday.

The 10-year muni benchmark increased to 2.281% in late activity on Monday, compared to the final read of 2.271% on Friday, according to Municipal Bond Information Services, a national consortium of municipal interdealer brokers. The AP-MBIS 30-year benchmark muni gained to 2.850% versus 2.832% on Friday.

The AP-MBIS benchmark index is a yield curve built on market data aggregated from MBIS member firms and is updated hourly on the Bond Buyer Data Workstation.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 30,481 trades on Friday on volume of $7.65 billion.

Prior week's actively traded issues
Revenue bonds comprised 56.64% of new issuance in the week ended Oct. 20, down from 56.97% in the previous week, according to Markit. General obligation bonds made up 37.56% of total issuance, up from 37.02%, while taxable bonds accounted for 5.80%, down from 6.01%.

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

In the GO bond sector, the San Diego Unified School District 4s of 2047 were traded 97 times. In the revenue bond sector, the New York City Transitional Finance Authority 4s of 2042 were traded 91 times. And in the taxable bond sector, the California 2.5s of 2022 were traded 19 times.

Previous week's top underwriters
The top municipal bond underwriters of last week included Bank of America Merrill Lynch, JPMorgan Securities, Citigroup, Goldman Sachs and Morgan Stanley, according to Thomson Reuters data.

In the week of Oct. 15 to Oct. 21, BAML underwrote $1.81 billion, JPMorgan $1.72 billion, Citi $1.7 billion, Goldman $1.11 billion, and Morgan Stanley $880.1 million.

Primary market
This week’s new issue calendar totals $10 billion; it’s composed of $8.3 billion of negotiated deals and $1.7 billion of competitive sales.

Action is set to get underway on Tuesday as Goldman Sachs prices Gainesville, Fla.’s $415.87 million of Series 2017A utility system revenue bonds.

The deal is rated Aa3 by Moody’s and AA-minus by S&P and Fitch.

JPMorgan Securities is expected to price the Missouri Health and Educational Facilities Authority’s $291.7 million of Series 2017C health facilities revenue bonds for Mercy Health on Tuesday.

The deal is rated Aa3 by Moody’s and AA-minus by S&P.

Jefferies is expected to price Wisconsin’s $272.6 million of GO refunding bonds of 2017, Series 2 on Tuesday.

The deal is rated Aa1 by Moody’s, AA by S&P, and AA-plus by Fitch and Kroll Bond Ratings Agency.

Morgan Stanley is set on Tuesday to price the Philadelphia Hospitals and Higher Education Facilities Authority’s $236.11 million of hospital revenue bonds for the Temple University Health System Obligated Group.

The deal is rated Ba1 by Moody’s, BBB-minus by S&P and BB-plus by Fitch.

Raymond James & Associates is expected to price the city and county of San Francisco’s Community Facilities District No. 2014-1 $1200.83 million of Series 2017A special tax bonds and Series 2017B taxable green bonds for the Transbay Transit Center.

ICE completes acquisition of BAML indices
Intercontinental Exchange has completed its acquisition of the Bank of America Merrill Lynch Global Research division’s fixed-income indexes, the firm said on Monday. Terms of the agreement were not disclosed.

The indexes will be renamed the ICE BofAML Indices and will become part of ICE Data Services.

“We’re excited to expand the breadth and scale of our index offering to give customers increased choice of third party benchmark solutions,” said Lynn Martin, ICE President.

The indices are the second largest fixed-income indices by assets under management globally, the firm said, adding that the AUM benchmarked against the combined fixed-income index business of ICE will now be almost $1 trillion.

Data appearing in this article from Municipal Bond Information Services, including the AP-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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