Municipal bonds finished weaker on Monday, traders said, as the market awaited $7.02 billion of new issuance this week, including deals from Kentucky and Wisconsin on Tuesday.
The yield on the 10-year benchmark muni general obligation rose four basis points to 2.18% from 2.14% on Friday, while the 30-year GO yield increased three basis points to 3.05% from 3.02%, according to the final read of Municipal Market Data's triple-A scale.
U.S. Treasuries were weaker on Monday. The yield on the two-year Treasury rose to 1.28% from 1.27% on Friday, while the 10-year Treasury yield gained to 2.32% from 2.28%, and the yield on the 30-year Treasury bond increased to 3.01% from 2.96%.
The 10-year muni to Treasury ratio was calculated at 93.8% on Monday, compared with 93.9% on Friday, while the 30-year muni to Treasury ratio stood at 101.3%, versus 102.3%, according to MMD.
Puerto Rico bonds rise
Prices on some actively traded Puerto Rico general obligations turned higher in Monday activity after bondholders rejected Gov. Ricardo Rossello’s debt-restructuring proposal.
In late trading, the commonwealth Series 2014A GO 8s of 2035 were trading at a high price of 65.25 cents on the dollar in 16 trades totaling $12.73 million, according to the Municipal Securities Rulemaking Board's EMMA website. Last Friday, the 8s of 2035 were trading at 63.25 cents on the dollar in two trades totaling $4.92 million
The commonwealth’s GO refunding improvement bonds Series 2012A 5s of 2041 were trading at a high price of 61.125 cents on the dollar in 21 trades totaling $18.77 million. Last Friday, the 5s of 2041 were trading at 56.761 cents on the dollar in 18 trades totaling $950,000.
And the commonwealth’s 2011 public improvement GO 5 3/4s of 2041 were trading at a high price of 61.50 cents on the dollar in 14 trades totaling $8.71 million in late trade. On Friday, the 5 3/4s were trading at a high price of 56.875 cents on the dollar in nine trades totaling $470,000.
This week’s new issue calendar consists of $5.96 billion of negotiated deals and $1.06 billion of competitive sales. Action will get underway on Tuesday with the pricing of several large deals.
The state of Wisconsin will be coming to market with $688.31 million of tax-exempt and taxable bonds in two separate sales.
Wells Fargo Securities is set to price the state’s $403.11 million of Series 2017C general fund annual appropriation refunding taxable bonds on Tuesday.
The deal is rated Aa3 by Moody’s Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings.
JPMorgan Securities is set to price the state’s $285.21 million of Series 2017-1 transportation revenue bonds on Tuesday.
This deal is rated Aa2 by Moody’s, AA-plus by S&P and Fitch and triple-A by Kroll Bond Rating Agency.
Bank of America Merrill Lynch is slated to price the Kentucky Economic Development Finance Authority’s $495 million of Series 2017 A and B hospital revenue refunding bonds for Owensboro Health on Tuesday.
The deal is rated Baa3 by Moody’s and BBB by Fitch.
Raymond James is expected to price the Richardson Independent School District, Texas’ $207.43 million of unlimited tax school building bonds on Tuesday.
The deal, backed by the Permanent School Fund guarantee program, is rated triple-A by Moody’s and S&P.
Citigroup is set to price Texas’ Austin Convention Enterprises Inc.’s $200 million of Series 2017 A and B convention center hotel revenue refunding bonds, consisting of first and second tier tranches, on Tuesday.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 34,178 trades on Friday on volume of $8.55 billion.
Prior week's actively traded issues
Revenue bonds comprised 57.48% of new issuance in the week ended April 28, up from 57.32% in the previous week, according to Markit.
General obligation bonds comprised 36.80% of total issuance, up from 36.53%, while taxable bonds made up 5.72%, down from 6.15%.
Some of the most actively traded issues by type were from Puerto Rico and California and Pennsylvania.
In the GO bond sector, the Puerto Rico Commonwealth 8s of 2035 were traded 31 times. In the revenue bond sector, the California Health Facilities Financing Authority 5s of 2027 were traded 83 times. And in the taxable bond sector, the California 2.367s of 2022 were traded 117 times.
Previous week's top underwriters
The top negotiated and competitive underwriters of last week included Bank of America Merrill Lynch, Wells Fargo Securities, Goldman Sachs, JPMorgan Securities, and Stifel, according to Thomson Reuters data.
In the week of April 23 to April 29, BAML underwrote $1.6 billion, Wells Fargo $1.3 billion, Goldman $850.6 million, JPMorgan $740.7 million and Stifel $660.1 million.