Municipal bond traders are set to see a second wave of new issue supply sweep over the market on Wednesday, the busiest primary week of 2015.
Secondary Market
Treasuries were narrowly mixed on Wednesday. The yield on the two-year Treasury rose to 0.86% from 0.84% on Tuesday, while the 10-year Treasury yield gained to 1.84% from 1.83% and the 30-year Treasury bond yield was flat from 2.70%.
Top quality municipal bonds finished weaker on Tuesday. The yield on the 10-year benchmark muni general obligation rose five basis points to 1.81% from 1.76% on Monday, while the 30-year muni yield gained six basis points to 2.86% from 2.80%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Tuesday at 98.8% compared to 101.3% on Monday, while the 30-year muni to Treasury ratio stood at 105.8% versus 107.1%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,256 trades on Tuesday on volume of $7.79 billion.
Primary Market
Wells Fargo Securities is set to price the New York Metropolitan Transportation Authority's $591.68 million of Series 2016A dedicated tax fund refunding bonds for institutions on Wednesday after a one day retail order period.
The issue was priced for retail to yield from 0.81% with a 5% coupon in 2019 to 3.25% at par in 2036; 2016 and 2017 maturities were offered as sealed bids.
The bonds are rated AA by Standard & Poor's and Fitch Ratings.
Massachusetts will be coming to market with a $1.1 billion general obligation bond sale.
Bank of America Merrill Lynch is set to price the $600 million of new money consolidated loan of 2016 Series A bonds and the $501.34 million of 2016 Series A refunding bonds for retail investors on Wednesday.
Proceeds of the sale will be used to finance state capital projects and will advance refund some portions of outstanding GOs.
The issue is rated Aa2 by Moody's Investors Service, and AA-plus by S&P and Fitch.
Wells Fargo Securities is expected to price the San Diego Public Facilities Financing Authority's $401.49 million of Series 2016A senior sewer revenue refunding bonds on Wednesday. The deal is rated AA by S&P and Fitch.
Barclays Capital is expected to sell Ohio State University's $600 million of taxable Series 2016A general receipts bonds. The deal is rated Aa1 by Moody's and AA by S&P and Fitch.
JPMorgan is set to price the Orange County School Board, Fla.'s $218.87 million of Series 2016B and C bonds. The issue is rated Aa2 by Moody's and AA by Fitch.
In the competitive sector, the Orange County Sanitation District, Calif., is selling $145.09 million of Series 2016A wastewater refunding revenue bonds. The deal is rated triple-A by S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $5.91 billion to $7.09 billion on Wednesday. The total is comprised of $2.65 billion of competitive sales and $5.58 billion of negotiated deals.
S&PDJI: Puerto Rico Indexes Outperformed in Feb.
As Puerto Rico's debt plan begins to form, municipal bonds from Puerto Rico have outperformed in February, according to J.R. Rieger, Global Head of Fixed Income at S&P Dow Jones Indices.
The S&P Municipal Bond Puerto Rico Index recorded a 2.69% return in February while the investment grade segment of the municipal bond market was barely into positive territory.
The General Obligation Bond Index of Puerto Rico recovered a more modest 0.71% for the month.
Meanwhile, Louisiana and North Dakota — both energy dependent states — moved into negative territory last month with the S&P Municipal Bond Louisiana Index falling by 0.35% and the North Dakota Index dropping 0.57%.
