Prices of top-quality municipal bonds were steady at mid-session, traders said, as the market gears up to take on this week's chunky new issue calendar after last week's busy dealings.
Secondary Market
The yield on the 10-year benchmark muni general obligation on Monday was steady from 2.29% on Friday, while the yield on the 30-year GO was flat from 3.25%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were lower, with the yield on the two-year Treasury note rising to 0.70% from 0.67% on Friday, while the 10-year yield rose to 2.37% from 2.34% and the 30-year yield increased to 3.09% from 3.08%.
The 10-year muni to Treasury ratio was calculated on Friday at 99.8% versus 98.2% on Thursday, while the 30-year muni to Treasury ratio stood at 106.9% compared to 105.0%, according to MMD.
Primary Market
Total volume for the week is estimated at $9.17 billion, consisting of $7.64 billion of negotiated deals and $1.53 billion of competitive sales.
The calendar is topped by the New York State Dormitory Authority. Morgan Stanley is slated to price DASNY's $1.17 billion of Series 2015A New York State sales tax revenue bonds for retail investors on Monday ahead of the institutional pricing on Tuesday. The issue is rated triple-A by Standard & Poor's and AA-plus by Fitch Ratings.
Morgan Stanley is also set to price on Tuesday the Port of Seattle, Wash.'s $592 million of intermediate lien revenue bonds, consisting of Series 2015A non-AMT, Series 2015B non-AMT and Series C AMT bonds. The issue is rated A1 by Moody's Investors Service and A-plus by S&P and Fitch.
Bank of America Merrill Lynch is expected to price the city and county of Honolulu, Hawaii's $593 million of wastewater system revenue bonds, which consist of Series 2015A junior refunding bonds and Series A and B senior refunding bonds. A one-day retail order period will be held on Tuesday ahead of the institutional pricing on Wednesday. The senior bonds are rated Aa2 by Moody's and AA-minus by S&P while the junior bonds are rated Aa3 by Moody's and AA-minus by S&P.
Siebert Brandford Shank is set to price the New York Metropolitan Transportation Authority's $500 million of Series 2015C transportation revenue refunding bonds, consisting of $400 million Subseries 2015C-1 fixed-rates, $50 million of Subseries 2015C-2 mandatory tender bonds and $50 million of Subseries 2015C-3 Libor floating-rate tender notes. A one-day retail order period will be held on Wednesday ahead of the institutional pricing on Thursday.
BAML is also slated to price the Hillsborough County Aviation Authority, Fla.'s $334 million of revenue bonds for the Tampa International Airport, consisting of Series A AMT subordinated revenue bonds and Series B non-AMT bonds. The deal, slated for sale on Wednesday, is rated A1 by Moody's, A-plus by S&P and A by Fitch.
BAML is also set to price the Harris County Cultural Education Facilities Finance Corp., Texas' $300 million of Series 2015 revenue bonds for the Houston Methodist Hospital on Wednesday. The bonds are rated AA by S&P.
In the competitive arena, Nashville, Tenn., is scheduled to sell $348 million of Series 2015C general obligation improvement bonds on Tuesday. The deal is rated Aa2 by Moody's and AA by S&P.
Nashville last sold comparable bonds competitively on March 4, 2008, when Merrill Lynch won $308 million of Series 2008 GOs with a true interest cost of 4.76%
Also on Tuesday, the Miami-Dade County School Board, Fla., will sell $200 million of Series 2015 GO school bonds. The issue is rated Aa2 by Moody's and A-plus by S&P.
The district last sold comparable bonds competitively on July 10, 2013, when JPMorgan won $109 million of Series 2013 GO school bonds with a TIC of 4.54%.
Prior Week's Actively Traded Issues by Sector
Revenue bonds comprised 53.64% of new issuance in the week ended July 17, down from 55.05% in the previous week, according to Markit. General obligation bonds comprised 36.56% of total issuance, up from 35.58%, while taxable bonds made up 9.80%, up from 9.37%.
Some of the most actively traded issues were in Puerto Rico, Pennsylvania and Illinois.
In the revenue bond sector, the Lehigh County General Purpose Authority, Pa., 4 1/4s of 2045 were traded 75 times. In the GO bond sector, the Puerto Rico commonwealth 8s of 2035 were traded 98 times. And in the taxable bond sector, the Chicago 7 3/4s of 2042 were traded 51 times, according to Markit.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 31,100 trades on Friday on volume of $6.589 billion.
The most active bond, based on the number of trades, was the Maryland general obligation bonds, state and local facilities loan of 2015, Second Series A tax exempt 3s of 2028, which traded 263 times at an average price of 99.319, an average yield of 3.961%. The bonds were initially priced at 98.50 to yield 3.141%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.16 billion to $12.58 billion on Monday. The total is comprised of $2.60 billion competitive sales and $9.99 billion of negotiated deals.
