Municipals finished stronger on Monday, according to traders, with yields on some top-quality maturities falling by as much as one basis point.
The market is looking at a $5.42 billion new issue calendar, which consists of $3.82 billion of negotiated deals and $1.60 billion of competitive sales.
The Federal Open Market Committee also meets this week, with an announcement on Wednesday that most observers expect will leave its target rate unchanged.
Secondary Market
The yield on the 10-year benchmark muni general obligation was steady from 1.75% on Friday, while the 30-year muni yield fell one basis point to 2.75% from 2.76%, according to the final read of Municipal Market Data's triple-A scale.
Treasuries were narrowly mixed. The yield on the two-year Treasury were unchanged at 0.87% from Friday, while the 10-year Treasury yield fell to 2.02% from 2.05% and the 30-year Treasury bond yield decreased to 2.80% from 2.82%.
The 10-year muni to Treasury ratio was calculated on Monday at 86.5% compared to 85.4% on Friday, while the 30-year muni to Treasury ratio stood at 98.1% versus 97.8%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 34,040 trades on Friday on volume of $7.16 billion.
Last Week's Most Active Sectors
Revenue bonds comprised 54.02% of new issuance in the week ended Jan. 22, down from 54.43% in the previous week, according to Markit. General obligation bonds comprised 38.31% of total issuance, up from 38.24%, while taxable bonds made up 7.67%, up from 7.33%.
Some of the most actively traded issues by type were in Puerto Rico, Indiana and Illinois. In the GO bond sector, the Puerto Rico Commonwealth 8s of 2035 traded 30 times. In the revenue bond sector, the Indiana Finance Authority 4s of 2051 traded 83 times. And in the taxable bond sector, the Illinois state 5.1s of 2033 traded 22 times,
Primary Market
On Tuesday, Fairfax County, Va., will competitively sell $371.47 million of Series 2016A public improvement and refunding bonds. The deal is rated triple-A by Moody's Investors Service, S&P and Fitch.
The county last competitively sold comparable bonds on Feb. 18, 2015, when Citigroup won $227.34 million of Series 2015A public improvement bonds with a true interest cost of 2.68%.
Ramirez & Co. is scheduled to price Nassau County, N.Y.'s $273 million of Series 2016A GO general improvement bonds on Tuesday. The deal is rated A2 by Moody's, A-plus by S&P and A by Fitch.
Wells Fargo Securities is slated to price the Airport Commission of the City and County of San Francisco's $239.77 million of second series revenue refunding bonds for the San Francisco International Airport on Tuesday. The deal is rated A1 by Moody's and A-plus by S&P and Fitch.
Raymond James & Associates is slated to price the Lamar Consolidated Independent School District, Texas' $141.11 million of unlimited tax refunding bonds on Tuesday. The issue is backed by the Permanent School Fund guarantee program and rated triple-A by Moody's and S&P.
Goldman Sachs is set to price the Nebraska Public Power District's $139.15 million general revenue bonds on Tuesday. The deal is expected to be rated A1 by Moody's, A by S&P and A-plus by Fitch.
The largest deal of the week comes on Wednesday from the Chicago Board of Education. JPMorgan Securities is scheduled to price the $875 million of unlimited tax general obligation bonds of dedicated revenues.
The issue is slated to consist of $795.52 million of Series 2016A tax-exempt GOs in three term maturities of 2035, 2040 and 2044. The $79.49 million of Series 2016B taxables are tentatively structured as a 2033 bullet.
The Chicago BOE has seen rating downgrades, state takeover talk and a cash crunch as of late. Standard & Poor's cut the CPS two notches to B-plus while Fitch Ratings chopped its rating by three notches, also to B-plus. The schools get their highest marks from Kroll Bond Ratings Agency, which gives the Board of Ed a grade of triple-B.
Also on Wednesday, the Massachusetts Clean Water Trust will be competitively selling $211.44 million of Series 19 state revolving fund green bonds. The issue is rated triple-A by Moody's, S&P and Fitch.
On Thursday, JPMorgan is set to price the Connecticut Health and Educational Facilities Authority's $250 million of revenue bonds for Yale University in a remarketing of two- and five-year put bonds. The issue is rated triple-A by Moody's and S&P.
Also on Thursday, Waco, Texas, will competitively sell two issues totaling $104.31 million. The sales consist of $77.75 million of Series 2016 combination tax and revenue certificates of obligation and $26.56 million of Series 2016 GO refunding bonds. Both issues are rated Aa2 by Moody's and AA-plus by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $338.0 million to $8.18 billion on Monday. The total is comprised of $2.85 billion competitive sales and $5.33 billion of negotiated deals.
