Top-quality municipal bonds were unchanged at mid-session, traders said, as market participants look ahead to a smaller-than-average new issue calendar. This week's calendar is estimated at $4.03 billion, comprised of $3.37 billion of negotiated deals and $661.4 million of competitive sales.
Secondary Market
The 10-year benchmark muni general obligation yield was flat from 2.33% on Friday, while the yield on the 30-year GO was unchanged from 3.08%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were little changed on Monday. The yield on the two-year Treasury dipped to 1.20% from 1.21% on Friday, while the 10-year Treasury yield declined to 2.47% from 2.48%, and the yield on the 30-year Treasury bond was unchanged from 3.06%.
On Friday, the 10-year muni to Treasury ratio was calculated at 94.0% compared to 93.8% on Thursday, while the 30-year muni to Treasury ratio stood at 100.7%, versus 100.4%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 36,853 trades on Friday on volume of $10.26 billion.
Prior Week's Actively Traded Issues
Revenue bonds comprised 58.08% of new issuance in the week ended Jan. 27, down from 58.48% in the previous week, according to
Some of the most actively traded issues by type in the week ended Jan. 27 were from Illinois and New York.
In the GO bond sector, the Chicago, Ill., 6s of 2038 were traded 126 times. In the revenue bond sector, the New York Transportation Development Corp.'s 5.25s of 2050 were traded 46 times. And in the taxable bond sector, the Chicago 7.045s of 2029 were traded 73 times.
Previous Week's Top Underwriters
The top negotiated and competitive underwriters of last week included Citigroup, Bank of America Merrill Lynch, Wells Fargo Securities, RBC Capital Markets and JPMorgan Securities, according to Thomson Reuters data.
In the week of Jan. 22 to Jan. 28, Citi underwrote $1.54 billion, BAML $713 million, Wells $649.1 million, RBC $622.3 million and JPM $383.3 million.
Primary Market
The biggest negotiated deal of the week is coming out of Oklahoma, when its Turnpike Authority sells $478.51 million of revenue bonds.
Wells Fargo Securities is expected to price the Series 2017A second senior revenue bonds and the Series 2017B refunding second senior revenue bonds on Wednesday after a one-day retail order period.
The deal is rated Aa3 by Moody's Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings.
Barclays Capital will price the New York City Municipal Water Finance Authority's $330 million of Fiscal 2017 Series DD water and sewer system second general resolution revenue bonds on Tuesday, after a one-day retail order period.
Piper Jaffray is expected to price the North Clackamas School District No. 12, Ore.'s $323.64 million Series 2017 general obligation bonds and Series 2017A GOs on Tuesday.
The issue is rated Aa1 by Moody's and AA-minus by S&P.
Citigroup is set to price the University of Colorado Hospital Authority's $300 million of Series 2017C-1 and Series 2017C-2 revenue put bonds. The deal is rated Aa3 by Moody's and AA-minus by S&P and Fitch.
In the competitive arena, the University of Maryland System is selling $115 million of Series 2017A tax-exempt auxiliary facility and tuition revenue bonds on Tuesday.
The system is also selling $52.26 million of Series 2017B tax-exempt auxiliary facility and tuition refunding revenue bonds
Both deals are rated Aa1 by Moody's and AA-plus by S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $966.1 million to $8.61 billion on Monday. The total is comprised of $1.60 billion of competitive sales and $7.01 billion of negotiated deals.
Refunding Gave PRC $34M in Gross Savings
HJ Sims announced on Monday that it had closed on a $160.365 million refinancing bond issue for Presbyterian Retirement Communities, also known as the Westminster Communities of Florida.
The deal closed on Dec. 15, 2016, with an all in true interest cost of 4.27% and saved PRC about $9.421 million on a present value basis, with actual aggregate savings of nearly $34.8 million through the life of the prior bonds, HJ Sims said.
PRC is the largest group of life plan communities in Florida and the 10th largest U.S. nonprofit operator of senior living communities.
As of result of the refinancing, PRC was able to reduce overall cost of capital; provide additional debt capacity while maintaining its A-minus rating from Fitch; and make improvement to its covenants.
"We expected this advanced refunding to be a fairly routine bond issue," said Hank Keith, PRC's CFO. "As it turns out -- with the election and a lot of refinancings and borrowings in the market -- this was not a routine bond issue. HJ Sims provided the additional resources, time and years of experience to accomplish all of the goals that we had set out at the beginning of the process."
