Municipal bonds were mixed at midday, according to traders, as the gilt-edged state of Maryland came to market with two competitive sales won by Bank of America Merrill Lynch and Citigroup.

Secondary market
The yield on the 10-year benchmark muni general obligation rose as much as two basis points from 1.91% on Tuesday, while the 30-year GO yield was steady from 2.78%, according to a read of Municipal Market Data's triple-A scale.

Treasuries were unchanged on Wednesday. The yield on the two-year Treasury was flat from 1.35% on Tuesday, the 10-year Treasury yield was unchanged from 2.26% and the yield on the 30-year Treasury bond was flat from 2.84%.

The 10-year muni-to-Treasury ratio was calculated at 84.5% on Tuesday, compared with 84.8% on Monday, while the 30-year muni-to-Treasury ratio stood at 98.0% versus 97.8%, according to MMD.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 40,561 trades on Tuesday on volume of $8.83 billion.

Primary market
Maryland competitively sold about $1.3 billion of general obligation bonds in two separate offerings.

Bank of America Merrill Lynch won the $792.83 million of state and local facilities loan of 2017 Series B tax-exempt refunding GOs with a true interest cost of 1.6566%. The issue was priced as 5s to yield 0.90% in 2019 and 1% in 2020 and to yield from 1.20% in 2022 to 1.81% in 2026.

Citigroup won the $550 million of state and local facilities loan of 2017 Series A tax-exempt GOs with a TIC of 2.2855%. The issue was priced to yield from 0.95% with a 5% coupon in 2020 to 2.95% with a 3% coupon in 2032.

Tuesday’s final MMD AAA yield curve based on a 5% coupon was calculated at 0.86% in 2019, 0.95% in 2020, 1.15% in 2022, 1.76% in 2026 and 2.35% in 2032.

Both sales are rated triple-A by Moody’s Investors Service, S&P Global Ratings and Fitch Ratings.

Since 2007 the Old Line State has sold $16.25 billion of securities, with the most issuance before this year occurring in 2014 when it sold $1.89 billion. It saw a low year of issuance 10 years ago when it sold $700 million. Wednesday’s sales put Maryland over the $2 billion mark for the year.

In the negotiated sector on Wednesday, Citi is expected to price the state of Louisiana’s $368 million of fuels tax revenue refunding bonds consisting of Series 2017B and Series 2017C second liens.

Bank of America Merrill Lynch is expected to price the city and county of Honolulu, Hawaii’s $411 million of general obligation bonds.

The issue is made up of tax-exempts, tax-exempt refundings, taxable refundings and taxable green bonds.

The deal is rated Aa1 by Moody’s and AA-plus by Fitch.

Piper Jaffray is expected to price the state of Mississippi’s $101 million of taxable GO on Wednesday.

The deal is rated Aa2 by Moody’s and AA by S&P.

Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar decreased $783.2 million to $8.99 billion on Wednesday. The total is comprised of $4.66 billion of competitive sales and $4.33 billion of negotiated deals.

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Chip Barnett

Chip Barnett

Chip Barnett is a journalist with more than 40 years of experience. Barnett is currently Senior Market Reporter for The Bond Buyer.
Aaron Weitzman

Aaron Weitzman

Aaron Weitzman is a markets reporter for The Bond Buyer, focusing on the sell side of the municipal bond market.