Top-quality municipal bonds were unchanged at mid-session, according to traders, as the market was set to see a calendar consisting of about $5.30 billion of new deals hit the screens this week.
Secondary Market
The yield on the 10-year benchmark muni general obligation was steady from 1.40% on Friday, while the yield on the 30-year muni was flat from 2.13%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were slightly weaker on Monday. The yield on the two-year Treasury rose to 0.72% from 0.71% on Friday, the 10-year Treasury yield gained to 1.53% from 1.52% and the yield on the 30-year Treasury bond increased to 2.26% from 2.24%.
On Friday, the 10-year muni to Treasury ratio was calculated at 92.5% compared to 90.9% on Thursday, while the 30-year muni to Treasury ratio stood at 95.3% versus 94.5%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 27,400 trades on Friday on volume of $10.40 billion.
Prior Week's Actively Traded Issues
Revenue bonds comprised 50.75% of new issuance in the week ended Aug. 12, down from 51.31% in the previous week, according to
Some of the most actively traded issues by type were from California and Missouri issuers. In the GO bond sector, the Oakland USD, Calif., 3s of 2041 were traded 59 times. In the revenue bond sector, the University of California Medical Center 3s of 2042 were traded 79 times. And in the taxable bond sector, the Missouri HEFA 3.09s of 2051 were traded 66 times.
Previous Week's Top Underwriters
The top negotiated and competitive underwriters of last week included Bank of America Merrill Lynch, Citigroup, Barclays Capital Markets, Raymond James & Associates and Wells Fargo Securities, according to Thomson Reuters data. In the week of Aug. 7-Aug. 13, BAML underwrote $1.63 billion, Citigroup $1.07 billion, Barclays $1.05 billion, Raymond James $627 million and Wells Fargo $603 million.
Primary Market
The week's new issue supply slate is composed of $3.65 billion of negotiated deals and $1.65 billion of competitive sales.
On Tuesday, Goldman Sachs is set to price the Brooklyn Area Local Development Corp.'s $481.97 million of Series 2016A tax-exempt and Series 2016B taxable bonds backed by payments in lieu of taxes. The PILOTs will refund outstanding bonds from a 2009 issue.
The bonds are rated Baa3 by Moody's Investors Service and BBB-minus by S&P Global Ratings.
Also on Tuesday, Morgan Stanley is expected to price the New Jersey Healthcare Facilities Financing Authority's $243.38 million of Series 2016 revenue bonds for the St. Joseph's Healthcare System Obligated Group.
Barclays Capital is set to price on Tuesday the Port of Tacoma, Wash.'s three series of bonds totaling $259.38 million. The deal consists of $150.66 million of Series 2016A non-AMT revenue refunding and Series 2016B AMT revenue and refunding bonds, rated Aa2 by Moody's and AA-minus by S&P. Barclays will also price the port's $108.72 million of Series 2016A non-AMT limited tax general obligation refunding bonds, rated Aa2 by Moody's and AA by S&P.
Ziegler is expected to price the Washington State Housing Finance Commission's $132.55 million of Series 2016 A&B non-profit housing revenue and refunding bonds on Tuesday for the Presbyterian Retirement Communities Northwest Project. The deal is rated BB-plus by Fitch Ratings.
Raymond James is expected to price New Haven, Conn.'s $117.57 million of Series 2016A GOs on Tuesday. The deal is rated Baa1 by Moody's and A-minus by S&P and Fitch.
Goldman is set to price the Irvine Ranch Water District, Calif.'s $117.51 million of Series 2016 certificates of participation on Tuesday. The deal is rated ripple-A by S&P and Fitch.
Raymond James is expected to price Memphis, Tenn.'s $110 million of water, gas and electric system revenue bonds on Tuesday.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.26 billion to $9.91 billion on Monday. The total is comprised of $3.57 billion of competitive sales and $6.34 billion of negotiated deals.
BAML Sees Mutual Fund Outflows in Oct.-Nov.
Mutual funds flows should stay positive for another month or two, and will likely turn negative in the October to November timeframe, Bank of America Merrill Lynch said in a Monday market comment.
"If funds flows reach -$200 million or worse, then muni rates have reached the peak in the bearish trend we have forecasted," BAML wrote, adding that "Since our long-term view remains very bullish to 2018-2019, with a bullish move resuming in early 2017, investors should be prepared once the funds flows turns to the -$200 million range."
