Top-rated municipal bonds finished stronger Tuesday, according to traders, who will see the first deals on the week's $5.5 billion new issue calendar hit the market on Wednesday.
Secondary Market
The yield on the 10-year benchmark muni general obligation dropped one basis point to 1.44% from 1.45% on Friday, while the yield on the 30-year fell one basis point to 2.13% from 2.14%, according to the final read of Municipal Market Data's triple-A scale.
Treasuries were stronger on Tuesday. The yield on the two-year Treasury declined to 0.73% from 0.79% on Friday, the 10-year Treasury yield dropped to 1.54% from 1.60% and the yield on the 30-year Treasury bond decreased to 2.23% from 2.28%.
The 10-year muni to Treasury ratio was calculated at 93.5% on Tuesday compared to 90.9% on Friday, while the 30-year muni to Treasury ratio stood at 95.1% versus 94.3%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 23,176 trades on Friday on volume of $7.70 billion.
Prior Week's Actively Traded Issues
Revenue bonds comprised 50.59% of new issuance in the week ended Sept. 2, up from 50.52% in the previous week, according to
Some of the most actively traded issues by type in the week were from California, Texas and Illinois issuers. In the GO bond sector, the California 5s of 2046 were traded 117 times. In the revenue bond sector, the University of Texas 2.5s of 2036 were traded 39 times. And in the taxable bond sector, the Illinois 6.63s of 2035 were traded 21 times.
Previous Week's Top Underwriters
The top negotiated and competitive underwriters of last week included JPMorgan Securities, Bank of America Merrill Lynch, Barclays Capital Markets, Wells Fargo Securities and Citigroup, according to Thomson Reuters data. In the week of Aug. 28-Sept. 3, JPMorgan underwrote $3.06 billion, BAML $847 million, Barclays $711 million, Wells Fargo $689 million and Citi $291 million.
Primary Market
This week's calendar is made up of $3.89 billion of negotiated deals and $1.61 billion of competitive sales.
The issuance will be mostly limited to two days, with most of the larger deals scheduled to price on Wednesday or Thursday.
On Wednesday, Wells Fargo Securities is set to price Austin, Texas' $187 million of Series 2016 public improvement and refunding bonds, Series 2016 certificates of obligation and Series 2016 public property finance contractual obligations. The deal is rated triple-A by Moody's Investors Service, S&P Global Ratings and Fitch Ratings.
RBC Capital Markets is expected to price Hamilton County, Ohio's $139 million of Series 2016 healthcare improvement and refunding revenue bonds for the Life-Enriching Communities project on Wednesday. The deal is rated BBB-minus by Fitch.
In the competitive arena on Wednesday, Washington state is selling about $225 million of motor vehicle future tax general obligation bonds in two separate offerings consisting of around $90 million of Series 2017C GO SR 520 Corridor program toll revenue bonds and approximately $134 million of Series 2017B GOs. The deals are rated Aa1 by Moody's and AA-plus by S&P and Fitch.
The largest negotiated sale of the week is coming from Texas Transportation Commission. Morgan Stanley will price the commission's $615.26 million of state highway fund first tier revenue bonds on Thursday.
Jefferies is expected to price the TTC's $90 million of state highway fund first tier revenue refunding put bonds, also on Thursday.
Jefferies also is expected to price the New York Counties Tobacco Trust VI's $292.16 million of Series 2016 A, B and C tobacco settlement pass-through bonds on Thursday.
Bank of America Merrill Lynch is set to price the California's Health Facilities Financing Authority's $306 million of revenue bonds for Providence St. Joseph Health on Thursday. The deal is rated Aa3 by Moody's and AA-minus by S&P and Fitch.
On Thursday, the Dormitory Authority of the State of New York is slated to sell five competitive issues totaling roughly $704.68 million on Thursday. The DASNY deals are rated Aa1 by Moody's and triple-A by S&P.
