Munis firmer ahead of new supply
Municipals were firmer on Monday, as market participants awaited the week's first issues from Montgomery County, Md., and Phoenix.
Volume for the week is estimated at $6.7 billion, consisting of $4.6 billion of negotiated deals and $2.1 billion of competitive sales. Action gets underway on Tuesday when Montgomery County competitively sells $684 million of general obligation bonds in four separate offerings.
The deals consist of $291.54 million of Series C consolidated public improvement refunding bonds of 2017, $170 million of Series A consolidated public improvement bonds of 2017, $144.06 million of Series D 2019 crossover consolidated public improvement refunding bonds of 2017, and $78.72 million of Series B consolidated public improvement refunding bonds of 2017.
The deals are rated triple-A by Moody’s Investors Service, S&P Global Ratings and Fitch Ratings.
Also on Tuesday, Citigroup is expected to price the Phoenix Civic Improvement Corp.’s $401 million of senior lien airport revenue and revenue refunding bonds.
The issue is composed of Series 2017A bonds subject to the alternative minimum tax, Series 2017B non-AMT bonds, and Series 2017C taxables. The deal is rated Aa3 by Moody’s and AA-minus by S&P.
And Siebert Cisneros Shank & Co. is expected to price the Pennsylvania Turnpike Commission’s $346.72 million of second series of 2017 subordinate revenue refunding bonds and second series of 2017 motor license fund-enhanced turnpike subordinate special revenue refunding bonds.
The revenue bonds are rated A3 by Moody’s, A-minus by Fitch and A-plus by Kroll Bond Rating Agency; the special revenue bonds are rated A2 by Moody’s and AA-minus by Fitch and Kroll.
On Thursday, Bank of America Merrill Lynch is set to price the biggest negotiated deal of the week — the Virginia Small Business Financing Authority’s $737 million of Series 2017 senior lien private activity revenue bonds. The tax-exempt Transform 66 P3 Project bonds are rated Baa3 by Moody’s and BBB by Fitch.
And in the competitive arena on Thursday, Santa Clara County, Calif., is selling $350 million of Election of 2008 refunding Series 2017C general obligation bonds.
The yield on the 10-year benchmark muni general obligation was one basis point lower to 2.01% from 2.02% on Friday, while the 30-year GO yield was also one basis point lower to 2.83% from 2.84%, according to a final read of Municipal Market Data`s triple-A scale.
U.S. Treasuries were stronger at the market close on Monday. The yield on the two-year Treasury fell to 1.58% from 1.60% on Friday, the 10-year Treasury yield dropped to 2.37% from 2.43% and yield on the 30-year Treasury bond decreased to 2.88% from 2.94%.
On Monday, the 10-year muni-to-Treasury ratio was calculated at 84.8% compared with 83.2% on Friday, while the 30-year muni-to-Treasury ratio stood at 98.2% versus 96.7%, according to MMD.
AP-MBIS 10-year muni at 2.330%, 30-year at 2.893%
The Associated Press-MBIS municipal non-callable 5% GO benchmark scale was slightly stronger on Monday around midday.
The 10-year muni benchmark yield dipped to 2.330% from the final read of 2.344% on Friday, according to Municipal Bond Information Services, a national consortium of municipal interdealer brokers. The AP-MBIS 30-year benchmark muni yield declined to 2.893% from 2.904% 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.
Previous week's top underwriters
The top municipal bond underwriters of last week included Citigroup, JPMorgan Securities, Bank of America Merrill Lynch, Morgan Stanley and Loop Capital Markets, according to Thomson Reuters data.
In the week of Oct. 22 to Oct. 28, Citi underwrote $1.54 billion, JPMorgan $1.25 billion, BAML $1.25 billion, Morgan Stanley $846 million, and Loop $750 million.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 30,669 trades on Friday on volume of $9.314 billion.
Prior week's actively traded issues
Revenue bonds comprised 55.80% of new issuance in the week ended Oct. 27, down from 56.64% in the previous week, according to Markit.
General obligation bonds made up 38.58% of total issuance, up from 37.56%, while taxable bonds accounted for 5.62%, down from 5.80%.
Some of the most actively traded bonds were from California and New York issuers.
In the GO bond sector, the Puerto Rico Commonwealth 8s of 2035 were traded 55 times. In the revenue bond sector, the Philadelphia Hospitals and Higher Education Facilities Authority 5s of 2034 were traded 38 times. And in the taxable bond sector, the Washington Health Care Facilities Authority 4.2s of 2047 were traded 28 times.
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