The municipal bond market is set to see the first of $8.16 billion in new issue volume come to market on Tuesday.
Traders will be watching muni yields, which have been moving off recent historic lows.
Secondary Market
U.S. Treasuries were little changed on Tuesday. The yield on the two-year Treasury was unchanged from 0.73% on Monday, while the 10-year Treasury yield was flat at 1.67% and the yield on the 30-year Treasury bond increased to 2.48% from 2.47%.
Top-rated municipal bonds finished weaker on Monday. The yield on 10-year benchmark muni general obligation rose four basis points to 1.47% from 1.43% on Friday, while the 30-year muni yield increased four basis points to 2.18% from 2.14%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 88.0% on Monday compared to 88.5% on Friday, while the 30-year muni to Treasury ratio stood at 88.3% versus 88.1%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 31,727 trades on Monday on volume of $7.14 billion.
Primary Market
Morgan Stanley is set to price the city of Los Angeles' $1.46 billion of tax and revenue anticipation notes.
Proceeds of the sale will be used to make prepayments to its police, fire and city employees' retirement system; another $400 million will go to the cash flow fund.
Since 2006, the city has sold almost $13 billion of TRANs. Before this sale, the biggest issuance sold by Los Angeles was in 2015 when it offered $1.39 billion of notes.
The TRANs are rated MIG1 by Moody's Investors Service SP1-plus by S&P Global Ratings and F1-plus by Fitch Ratings.
Morgan Stanley is also set to price the New York Metropolitan Transportation Authority's $507.45 million of Series 2016B transportation revenue refunding bonds for retail investors ahead of the institutional pricing on Wednesday.
And Morgan Stanley will price the New York State Housing Finance Agency's $302.69 million of Series 2016C affordable housing revenue bonds.
Citigroup is expected to price Iowa's $264 million of IJobs Program special obligation refunding bonds. The deal is rated Aa2 by Moody's and AA by S&P.
Bank of America Merrill Lynch is set to price the California Housing Finance Agency's $236 million of Series 2016A taxable home mortgage revenue bonds. The deal is rated A2 by Moody's and AA-minus by S&P.
RBC Capital Markets is expected to price the Pennsylvania Housing Finance Agency's $234.62 million of single-family mortgage revenue bonds. The deal is rated Aa2 by Moody's and AA-plus by S&P.
BAML is set to price Wayne County, Mich.'s $173 million of taxable general obligation tax revenue notes. The notes are rated SP1 by S&P.
JPMorgan Securities is expected to price the Reedy Creek Improvement District, Fla.'s $165 million of Series 2016A ad valorem tax bonds. The deal is rated Aa3 by Moody's and AA-minus by S&P and Fitch.
Wells Fargo Securities is set to price the Port of Morrow, Ore.'s $120 million of taxable Series 2016-2 transmission facilities revenue bonds for the Bonneville Cooperation Project No. 5. The deal is rated Aa1 by Moody's and AA by Fitch.
JPMorgan is expected to price the Gilbert Water Resources Municipal Property Corp., Ariz.'s $110 million of Series 2016 senior lien utility system revenue and revenue refunding bonds. The deal is rated triple-ZA by S&P and AA-plus by Fitch.
In the competitive sector on Tuesday, the Virginia College Building Authority is selling $234.39 million of Series 2016A educational facilities revenue refunding bonds under the public higher education financing program. The deal is rated Aa1 by Moody's, AA by S&P and AA-plus by Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $56.5 million to $13.05 billion on Tuesday. The total is comprised of $3.72 billion of competitive sales and $9.32 billion of negotiated deals.
