Top-rated municipal bonds finished unchanged on Tuesday, according to traders, who came back to work for the first trading day of 2017. The market awaits a $3 billion new issue slate this week, with the calendar composed of $2.92 billion of negotiated deals and $84.2 million of competitive sales.
Secondary Market
The 10-year benchmark muni general obligation yield was steady at 2.32%, while the yield on the 30-year GO was flat from 3.05% on Friday, according to the final read of the 5% January maturities of Municipal Market Data's AAA scale.
"In today's MMD read, there will be the indication of market shift as well as the roll from December maturities to January maturities for the year next out," MMD Senior Market Analyst Randy Smolik wrote in a Tuesday market comment. "The muni market was unchanged, yet the MMD curve showed changes reflecting the roll from December to January and the roll down of maturities.
"For instance the roll down of 2027 was from an 11-year spot with the maturity of 12/2027 (late yield of 2.38%) to a 10-year spot with a maturity of 1/2027 (early yield of 2.32%). So the MMD AAA 10-year spot rolled from 2.31% (12/2026) to 2.32% (1/2027) while the yield of the 2027 maturity rolled down 6 basis points from late to early months."
U.S. Treasuries were mixed on Tuesday. The yield on the two-year Treasury rose to 1.22% from 1.19% on Friday, while the 10-year Treasury yield gained to 2.45% from 2.44%, and the yield on the 30-year Treasury bond decreased to 3.05% from 3.06%.
The 10-year muni to Treasury ratio was calculated at 94.6% on Tuesday, compared with 94.6% on Friday, while the 30-year muni to Treasury ratio stood at 99.3%, versus 100.0%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 21,702 trades on Friday on volume of $6.55 billion.
Prior Week's Actively Traded Issues
Revenue bonds comprised 59.03% of new issuance in the week ended Dec. 30, down from 59.08% in the previous week, according
General obligation bonds comprised 36.30% of total issuance, down from 35.38%, while taxable bonds made up 4.67%, up from 4.54%.
Some of the most actively traded issues by type were from New York, California and Connecticut.
In the GO bond sector, the New York City zeroes of 2038 were traded 24 times. In the revenue bond sector, the California Municipal Finance Authority 0.65s of 2021 were traded 22 times. And in the taxable bond sector, the Connecticut 2.52s of 2025 were traded seven times.
Primary Market
Primary market action won't get underway in earnest until Thursday, when a spate of higher education deals are on the calendar.
Barclays Capital is set to price the Board of Regents of the Texas State University System's $570.83 million of Series 2017A revenue financing system revenue and refunding bonds on Thursday. The deal is rated Aa2 by Moody's Investors Service and AA by Fitch Ratings.
JPMorgan Securities is expected to price the Board of Regents of the University of North Texas' $214.92 million of Series 2017A revenue financing system refunding and improvement bonds on Thursday. The deal is rated Aa2 by Moody's and AA by Fitch.
Barclays is set to price the Board of Regents of the University of North Texas' $164.99 million of Series 2017B taxable revenue financing and improvement bonds on Thursday. The deal is rated Aa2 by Moody's and AA by Fitch.
Wells Fargo Securities is expected to price the University of Pittsburgh, Pa.'s $525 million of Series 2017A taxable university refunding bonds on Thursday. The deal is rated Aa1 by Moody's and AA-plus by S&P Global Ratings.
Wells Fargo is also set to price the District of Columbia's $311.52 million of Series 2017 refunding revenue bonds for Georgetown University on Thursday. The deal is rated A2 by Moody's and A by S&P.
Piper Jaffray is expected to price the El Paso Independent School District, Texas' $184.09 million of unlimited tax school building bonds on Thursday. The deal is rated Aaa by Moody's.
Piper is also set to price the Ysleta Independent School District, Texas' $171.38 million of unlimited tax school building general obligation bonds on Wednesday. The deal is rated triple-A by Moody's and S&P.
Citigroup is set to price the New York State Housing Finance Agency's $120 million of affordable housing Series 2017A climate bond certified green bonds and Series 2017B revenue bonds on Thursday.
In the competitive arena, the Cheery Creek School District Number 5, Colo., will sell $150 million of Series 2017 general obligation bonds on Thursday. The deal is rated Aa1 by Moody's and AA by S&P.
In the short-term competitive arena, Colorado is selling $375 million of Series 2016B education loan program tax and revenue anticipation notes Thursday. The deal is rated MIG1 by Moody's and SP1-plus by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $465 million to $10.09 billion for Wednesday. The total is comprised of $1.87 billion of competitive sales and $8.22 billion of negotiated deals.
