Top-quality municipal bonds were stronger at mid-session, according to traders, who were seeing the first of the week’s new issues move into the market.
The yield on the 10-year benchmark muni general obligation fell as much as one basis point from 2.02% on Friday, while the 30-year GO yield dropped as much as one basis point from 2.83%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were stronger on Tuesday. The yield on the two-year Treasury was dropped to 1.50% from 1.52% on Friday, the 10-year Treasury yield declined to 2.33% from 2.37% and yield on the 30-year Treasury bond decreased to 2.88% from 2.90%.
On Friday, the 10-year muni-to-Treasury ratio was calculated at 85.4% compared with 85.6% on Thursday, while the 30-year muni-to-Treasury ratio stood at 97.5% versus 97.9%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 30,572 trades on Friday on volume of $6.84 billion.
Prior week's actively traded issues
Revenue bonds comprised 56.57% of new issuance in the week ended Oct. 6, up from 56.13% in the previous week, according to Markit. General obligation bonds made up 37.36% of total issuance, down from 37.64%, while taxable bonds accounted for 6.07%, down from 6.23%.
Some of the most actively traded bonds by type were from Puerto Rico, Arizona and California issuers.
In the GO bond sector, the Puerto Rico Commonwealth 8s of 2035 were traded 88 times. In the revenue bond sector, the Maricopa County Industrial Development Authority, Ariz., 4s of 2041 were traded 40 times. And in the taxable bond sector, the California 7.55s of 2039 were traded 13 times.
This week’s $7.2 billion new issue slate is comprised of $5.1 billion of negotiated deals and $2.1 billion of competitive sales.
On Tuesday, the Johnson County Water District No. 1, Kan., competitively sold $146.06 million of bonds in two separate offerings.
Wells Fargo Securities won the $107.42 million of Series 2017A water revenue refunding bonds with a true interest cost of 2.48%. Pricing information was not immediately available.
Wells Fargo also won the $38.64 million of Series 2017B water revenue bonds with a TIC of 3.07%.
The deals are rated triple-A by Moody’s Investors Service and S&P Global Ratings.
On Wednesday, Bank of America Merrill Lynch is slated to price the North Texas Tollway Authority’s $2.57 billion of system revenue and refunding bonds for retail investors ahead of the institutional pricing on Thursday.
The issue is composed of Series 2017A first tier bonds and Series 2017B second tier bonds.
The Series 2017A bonds are rated A1 by Moody’s and A by S&P while the Series 2017B bonds are rated A2 by Moody’s and A-minus by S&P.
Also coming Wednesday is an $897 million deal from the airport commission of the city and county of San Francisco.
Jefferies is expected to price the bonds for the San Francisco International Airport, which is composed of Series 2017A, Series 2017D and Series 2018A bonds subject to the alternative minimum tax, Series 2017 non-AMT bonds and Series 2017C taxables.
The bonds are rated A1 by Moody’s and A-plus by S&P and Fitch Ratings.
In the competitive arena on Wednesday, Texas A&M University Board of Regents is selling $399.78 million of permanent university fund bonds in two offerings consisting of $309.83 million Series 2017B taxables and $89.95 million of Series 2017A tax-exempts.
Both deals are rated triple-A by Moody’s, S&P and Fitch.
And the state of Ohio will sell $265 million of bonds in two sales consisting of $175 million of Series 2017A tax-exempt infrastructure improvement general obligation bonds and $90 million of Series 2017A taxable Third Frontier Research and Development taxable GOs.
The deals are rated Aa1 by Moody’s and AA-plus by S&P and Fitch.
In the short-term competitive sector on Wednesday, the Louisville and Jefferson County Metropolitan Sewer District, Ky., is selling $226.34 million of Series 2017 sewer and drainage system subordinated bond anticipation notes.
The BANs are rated SP1-plus by S&P.
Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar increased $1.80 billion to $10.37 billion on Tuesday. The total is comprised of $4.89 billion of competitive sales and $5.48 billion of negotiated deals.