Top-quality municipal bonds finished steady on Monday, traders said, as they awaited $12.7 billion of new supply, which is set to start hitting the market on Tuesday.
The yield on 10-year benchmark muni general obligation ended unchanged on Monday from 1.62% on Friday, while the 30-year muni yield was steady from 2.40%, 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 0.79% from 0.78% on Friday, while the 10-year Treasury yield gained to 1.72% from 1.70% and the yield on the 30-year Treasury bond increased to 2.54% from 2.52%.
The 10-year muni to Treasury ratio was calculated at 94.1% on Monday compared to 95.1% on Friday, while the 30-year muni to Treasury ratio stood at 94.3% versus 95.3%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 33,702 trades on Friday on volume of $13.90 billion.
Prior Week's Actively Traded Issues
Revenue bonds comprised 52.19% of new issuance in the week ended June 3, down from 53.06% in the previous week, according to data
General obligation bonds comprised 40.94% of total issuance, up from 39.99%, while taxable bonds made up 6.87%, down from 6.95%.
Some of the most actively traded issues by type were from Massachusetts and New York issuers. In the GO bond sector, the Mass. Educational Financing Authority 3.5s of 2033 were traded 29 times. In the revenue bond sector, the Dormitory Authority of the State of New York 4s of 2043 were traded 37 times. And in the taxable bond sector, the DASNY 3.879s of 2046 were traded 66 times, Markit said.
Previous Week's Top Underwriters
The top negotiated and competitive underwriters of last week included Citigroup, Morgan Stanley, Bank of America Merrill Lynch, Wells Fargo Securities and RBC Capital Markets, according to Thomson Reuters data. In the week of May 29-June 4, Citi underwrote $1.45 billion, Morgan Stanley did $837.7 million, BAML had $367.7 million, Wells Fargo did $326.4 million and RBC had $238.7 million.
Primary Market
New muni supply is estimated at $12.71 billion, the highest volume week for the year, in a calendar which is made up of $7.29 billion of negotiated deals and $5.42 billion of competitive sales.
On Monday, Bank of America Merrill Lynch priced the Metropolitan Water Reclamation District of Greater Chicago's $427.23 million of general obligation bonds.
The $281.92 million Series 2016A unlimited tax refunding bonds were priced as 5s to yield from 1.74% in 2023 to 2.46% in 2031. The $41.31 million of Series 2016B GO limited tax refunding bonds were priced as 5s to yield from 1.79% in 2023 to 2.51% in 2031. The $30 million of Series 2016C GO unlimited tax capital improvement green bonds were priced as 5s to yield 2.85% in 3045. The $20 million of Series 2016D GO limited tax capital improvement green bonds were priced as 5s to yield from 1.69% in 2022 to 2.46% in 2030. The $50 million of Series 2016E GO unlimited tax alternative revenue source green bonds were priced as 5s to yield from 1.69% in 2022 to 2.82% in 2041; a 2045 maturity was priced as 5s to yield 2.86%.
The deal is rated AA-plus by S&P Global Markets and triple-A by Fitch Ratings.
On Tuesday, Georgia will competitively sell about $1.37 billion of bonds in five separate offerings.
The deals include $382 million of Series 2016C-1 and C-2 general obligation refunding bonds, $362 million of Series 2016A Tranche 1 GOs, $356 million of Series 2016A Tranche 2 GOs, $200 million of Series 2016B taxable GOs, and $68 million of Series 2016D taxable refunding GOs.
All five sales are rated triple-A by Moody's Investors Service, S&P and Fitch.
Also on Tuesday, Prince George's County, Md., will sell $177 million of GOs in two separate offerings consisting of $115.8 million of Series 2016A GO consolidated public improvement bonds and $61.55 million of Series 2016B GO consolidated public improvement refunding bonds. Both deals are rated triple-A by Moody's, S&P and Fitch.
In the negotiated arena on Tuesday, Citigroup is expected to price the New York Transportation Development Corp.'s $850 million of special facility revenue refunding AMT bonds for the American Airlines JFK Project.
JP Morgan is expected to price the District of Columbia's $422 million of Series 2016A of GO bonds on Tuesday. The deal is rated Aa1 by Moody's and AA by S&P and Fitch.
And Barclays Capital is set to price the Pennsylvania State University's $2349 million of Series 2016B refunding bonds. The deal is rated Aa1 by Moody's and AA by S&P.
On Tuesday's short-term negotiated calendar, Piper Jaffray is slated to price Idaho's $514 million of tax anticipation notes.
