Top-quality municipal bonds were mixed at mid-session, according to traders, with prices weaker on the short end, steady for intermediates, and stronger on the long end.
In the primary market, two large deals kicked off the week's new issue action.
Secondary Market
The yield on the 10-year benchmark muni general obligation was as much as two basis points weaker from 2.01% on Friday, while the 30-year yield was off as much as three basis points from 2.96%, according to a read of Municipal Market Data's triple-A scale. Shorter maturities were as much as three basis points stronger while intermediate maturities were flat.
Treasury prices were higher. The yield on the two-year Treasury dropped to 0.92% from 0.94% on Friday while the 10-year Treasury yield decreased to 2.22% from 2.27% and the 30-year declined to 2.95% from 3.00%.
The 10-year muni to Treasury ratio was calculated on Friday at 88.4% from 86.9% on Thursday, while the 30-year muni to Treasury ratio stood at 98.3% compared to 96.8%, according to MMD.
Primary Market
In the competitive arena on Monday, King County, Wash., sold $175.74 million of Series 2015E limited tax general obligation refunding bonds.
JPMorgan Securities won the bonds with a true interest cost of 2.89%. The issue was priced to yield from 0.45% with a 2% coupon in 2016 to 3.30% with a 4% coupon in 2036.
The issue was rated Aa1 by Moody's Investors Service, triple-A by Standard & Poor's and AA-plus by Fitch Ratings.
The last time the county competitively sold comparable bonds was on Oct. 19 when Citigroup won $50.6 million of Series 2015 GOLT and refunding bonds with a TIC of 3.06%.
Also on Monday, Raymond James & Associates priced the Metropolitan Nashville Airport Authority, Tenn.'s $197 million of airport improvement revenue bonds, Series 2015A non-alternative minimum tax bonds and Series 2015B AMT bonds.
The $93.97 million of non-AMT bonds were priced as 5s to yield from 1.02% in 2018 to 3.15% in 2035, 3.34% in 2040 and 3.41% in 2045. The $103.03 million of AMT bonds were priced as 5s to yield from 1.15% in 2018 to 3.45% in 2035, 3.64% in 2040 and 3.71% in 2045.
The issue was rated A1 by Moody's and A-plus by S&P.
On Tuesday, the Empire State Development Corp. will offer about $1.14 billion of personal income tax revenue bonds in four separate competitive sales for the New York State Urban Development Corp.
The offering consists of $404.73 million of Series 2015A Group B bonds; $386.64 million of Series 2015A Group B bonds; $237.56 million of Series 2015B taxable bonds; and $114.66 million of Series 2015A Group C bonds. All four PIT sales are rated Aa1 by Moody's.
The last time the ESDC competitively sold comparable tax-exempt bonds was on Dec. 2, 2014, when JPMorgan won $414.86 million of Series 2014A Group A PIT bonds with a TIC of 1.82%; ESDC last sold comparable taxable bonds on Dec. 2, 2014, when Goldman Sachs won $370.82 million of Series 2014B bonds.
Las Vegas, Nev., will competitively sell $164.43 million of Series 2015C GOLT City Hall bonds, additionally secured by pledged revenues. The issue is rated Aa1 by Moody's and AA by S&P.
In the negotiated sector on Tuesday, Citi is expected to price the Indiana Municipal Power Agency's $385 million of power supply system revenue bonds. The deal is rated A1 by Moody's and A-plus by both S&P and Fitch.
RBC Capital Markets is expected to price the Illinois State Toll Highway Authority's $340 million of senior revenue refunding bonds. The deal is rated AA-minus by Fitch.
Wells Fargo Securities is set to sell the New York City Housing Development Corp.'s $129.33 million of Series H&I multi-family housing revenue Sustainable Neighborhood bonds. This issue, which has a mandatory tender maturity of 2020, is rated Aa2 by Moody's and AA-plus by S&P.
Additionally, JPMorgan is slated to price the New York City HDC's Series 2015 G fixed-rate multi-family housing revenue Sustainable Neighborhood bonds. The issue is also rated Aa2 by Moody's and AA-plus by S&P.
On Wednesday, Clemson University in South Carolina will be selling two separate competitive issues totaling $210.8 million, consisting of $191 million of Series 2015B higher education revenue bonds and $19.8 million of Series 2015B athletic facilities revenue bonds. The timing couldn't be more perfect as the Tigers football program is one of two undefeated teams left in college football.
The university last sold bonds competitively on May 5, when Citi won $64.385 million with a TIC of 3.73%.
In the negotiated sector, RBC Capital Markets is expected to price the Park Creek Metropolitan District, Colo.'s $252.71 million of Series 2015A senior limited property tax supported revenue refunding bonds. The issue is rated triple-B by Fitch.
On Thursday, Morgan Stanley is expected to price the New Jersey Healthcare Facilities' $266.72 million of revenue and refunding bonds. The deal is rated triple-B by Fitch.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 31,484 trades on Friday on volume of $5.39 million.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $559.3 million to $9.99 billion on Monday. The total is comprised of $3.38 billion competitive sales and $6.60 billion of negotiated deals.
Last Week's Most Actively Traded Bond Types
Revenue bonds comprised 54.60% of new issuance in the week ended Dec. 4, down from 55.47% in the previous week, according to Markit. General obligation bonds comprised 37.77% of total issuance, up from 37.38%, while taxable bonds made up 7.63%, up from 7.15%.
Some of the most actively traded issues by type in the week ended Dec. 4 were in New Jersey, Puerto Rico and Texas, according to Markit.
In the revenue bond sector, the New Jersey Transportation Trust Fund Authority 4 3/4s of 2038 were traded 59 times. In the GO bond sector, the Puerto Rico commonwealth 8s of 2035 were traded 55 times. And in the taxable bond sector, the University of Texas 3.78s of 2045 were traded 16 times, Markit said.
