Top-rated municipal bonds were steady at md-session, according to traders as the bond market gets set to see about $10.23 billion of new supply hit the screens this week, with the biggest bond deal of 2017 to date slated to be priced.
Secondary Market
The 10-year benchmark muni general obligation yield was flat at 2.41% from Friday, while the yield on the 30-year GO was unchanged at 3.18%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were mostly weaker Monday around midday. The yield on the two-year Treasury was steady from 1.31% on Friday, while the 10-year Treasury yield rose to 2.50% from 2.49%, and the yield on the 30-year Treasury bond was higher to 3.10% from 3.08%.
On Friday, the 10-year muni to Treasury ratio was calculated at 96.9% compared to 96.0% on Thursday, while the 30-year muni to Treasury ratio stood at 103.2%, versus 102.5%, according to MMD.
Primary Market
This week's calendar is composed of $7.69 billion of negotiated deals and $2.54 billion of competitive sales.
The state of California is scheduled to hit the market with the largest bond deal of 2017 to date when it sells $2.45 billion of various purpose general obligation bonds for institutions on Tuesday. Some market sources said if the deal sees good demand, it could be upsized – perhaps to as much as $3.5 billion.
The deal was priced for retail on Monday. The $519.295 million of various purpose GO bonds were priced for retail to yield 1.41% with a 5% coupon in 2020 to 2.40% with a 5% coupon in 2024. A term bond in 2046 was priced in a split maturity to yield 3.97% with a 4% coupon and 3.52% with a 5% coupon. The 2017 maturity was offered as a sealed bid.
The $1.93 billion of various purpose GO refunding bonds were priced for retail to yield from 1.18% with a 3% coupon, a 4% coupon and a 5% in a triple split maturity in 2019 to 3.89% with a 4% coupon and 3.47% with a 5% coupon in a split 2038 maturity. No retail orders were taken in the third split of the 2020 maturity, the second split of the 2022 maturity, the 2023 maturity or the second split of the 2024 maturity. The 2018 maturity was offered as a sealed bid. The deal is rated Aa3 by Moody's and AA-minus by S&P and Fitch.
On Monday, JPMorgan Securities held a second day of a two-day retail order period on the New York City Transitional Finance Authority's $800 million of future tax secured subordinate refunding bonds ahead of the institutional pricing on Tuesday.
On Monday, the TFA's $761.725 million of Fiscal 2017 Series C future tax secured tax-exempt subordinated bonds were priced for retail to yield from 1.23% with 4% and 5% coupons in a split 2019 maturity to 3.64% with a 3.50% coupon and 3.59% with a 4% coupon in a split 2034 maturity. A 2018 maturity was offered as a sealed bid; no retail orders were taken in the 2030-2032 maturities.
The TFA's $38.275 million of Fiscal 2017 Series D future tax secured tax-exempt subordinated bonds were priced for retail to yield from 1.23% with a 3% coupon in 2019 to 3.64% with a 3.50% coupon in 2034. The 2017 and 2018 maturities were offered as sealed bids.
On Friday, the TFA's $761.73 million of Fiscal 2017 Series C future tax secured tax-exempt subordinated bonds were priced for retail to yield from 1.19% with 4% and 5% coupons in a split 2019 maturity to 3.59% with a 3.50% coupon and 3.54% with a 4% coupon in a split 2034 maturity. A 2018 maturity was offered as a sealed bid; no retail orders were taken in the 2030-2032 maturities.
The TFA's $38.28 million of Fiscal 2017 Series D future tax secured tax-exempt subordinated bonds were priced for retail to yield from 1.19% with a 3% coupon in 2019 to 3.59% with a 3.50% coupon in 2034. The 2017 and 2018 maturities were offered as sealed bids.
The deal is rated Aa1 by Moody's Investors Service and triple-A by S&P Global Ratings and Fitch Ratings.
In the competitive arena, the state of Maryland will be selling almost $1.2 billion of tax-exempt and taxable general obligation bonds in three separate sales on Wednesday.
All three deals are rated triple-A by Moody's S&P and Fitch.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 38,074 trades on Friday on volume of $7.75 billion.
Prior Week's Actively Traded Issues
Revenue bonds comprised 58.51% of new issuance in the week ended March 3, down from 58.83% in the previous week, according to
Some of the most actively traded issues by type in the week ended March 3 were from Maryland, New York, and Alabama.
In the GO bond sector, the Baltimore County, Md., 3s of 2018 were traded 29 times. In the revenue bond sector, the New York Municipal Water Finance Authority 4s of 2039 were traded 52 times. And in the taxable bond sector, the Alabama Port Authority 4.722s of 2040 were traded 38 times.
Previous Week's Top Underwriters
The top negotiated and competitive underwriters of last week included Bank of America Merrill Lynch, RBC Capital Markets, Morgan Stanley, Siebert Cisneros Shack Co., and Piper Jaffray, according to Thomson Reuters data.
In the week of Feb. 26 to March 4, BAML underwrote $1.1 billion, RBC $531.6 million, Morgan Stanley $425.3 million, SCSCO $392.1 million and Piper Jaffray $277.2 million.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $267.3 million to $14.85 billion on Monday. The total is comprised of $4.78 billion of competitive sales and $10.06 billion of negotiated deals.
