Top-shelf municipal bonds were steady around lunchtime, as muni traders are seeing a busier than usual Monday with a few deals pricing for retail and for institutional investors.

Primary market
Ipreo estimates volume will sink to $4.24 billion, from the revised total of $7.46 billion sold in the past week, according to updated figures from Thomson Reuters. The calendar for the week ahead is composed of $3.62 billion of negotiated deals and $621 million of competitive sales.

The market will see an unusual amount of activity for a Monday – including two retail order periods and two institutional pricings.

On Monday, Bank of America Merrill Lynch priced New York City’s $800.45 million of general obligation bonds for retail investors in the first day of a two-day retail order period, preceding institutional pricing on Wednesday.

The bonds were priced for retail to yield from 0.90% with a 4% coupon in 2018 to 2.26% with a 5% coupon in 2028. The deal is rated Aa2 by Moody’s Investors Service and AA by S&P Global Ratings and Fitch Ratings.

Citi is set to price the Port of Seattle’s $266 million of Series 2017B taxable intermediate lien revenue and refunding bonds, a day before pricing the other two pieces of the whole series: $17.33 million of Series 2017A bonds and $324.8 million of Series 2017C alternative-minimum tax bonds.

A market source said that the pre-marketing scale for the $265.99 million of taxable bonds were about 55 basis points above the comparable Treasury in 2019 and about 140 basis points above the comparable Treasury in 2032. A term bond in 2036 was about 95 basis points above the comparable Treasury. The 2017 and 2018 maturities were offered as sealed bids. The deal is rated A1 by Moody’s, A-plus by S&P and AA-minus by Fitch.

Morgan Stanley priced the Connecticut Housing Finance Authority’s $125 million of housing mortgage finance program bonds for retail investors ahead of institutional pricing on Tuesday, although a market source indicated the deal might get accelerated into institutional pricing later today.

The $121.315 million of 2017 subseries D-1 non-alternative minimum tax bonds were priced for retail at par to yield from 1.05% and 1.125% in a split 2019 maturity to 2.70% and 2.75% in a split 2028 maturity. The bonds were also priced at par to yield 3.20% in a 2032 term bond, 3.40% in a 2035 term bond and 3.60% in a 2042 term bond. A term bond in 2047 was priced to yield 1.97% with a 4% coupon.

The $3.685 million of 2017 subseries D-2 AMT bonds were offered as a sealed bid in a split 2018 maturity. The deal is rated triple-A by Moody’s and S&P.

Previous week's top underwriters
The top negotiated and competitive municipal bond underwriters of last week included Bank of America Merrill Lynch, Morgan Stanley, Citigroup, Loop Capital Markets and Goldman Sachs, according to Thomson Reuters data.

In the week of July 16 to July 22, BAML underwrote $1.36 billion, Morgan Stanley $766 million, Citi $648 million, Loop $647 million, and Goldman $618 million.

Secondary market
Top shelf municipal bonds were unchanged on Monday around midday. The yield on the 10-year benchmark muni general obligation was flat at 1.90% from Friday, while the 30-year GO yield was steady at 2.69%, according to a read of Municipal Market Data's triple-A scale.

Treasuries were weaker on Monday around midday. The yield on the two-year Treasury gained to 1.36% from 1.34% on Friday, the 10-year Treasury yield rose to 2.25% from 2.23% and the yield on the 30-year Treasury bond increased to 2.82% from 2.80%.

The 10-year muni to Treasury ratio was calculated at 85.1% on Friday, compared with 84.8% on Thursday, while the 30-year muni to Treasury ratio stood at 96.0% versus 95.6%, according to MMD.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 29,522 trades on Friday on volume of $8.379 billion.

Prior week's actively traded issues
Revenue bonds comprised 54.85% of new issuance in the week ended July 21, up from 53.96% in the previous week, according to Markit. General obligation bonds comprised 38.65% of total issuance, down from 39.65%, while taxable bonds made up 6.50%, up from 6.39%.

Some of the most actively traded bonds by type were from Illinois and New York issuers.

In the GO bond sector, the Chicago Board of Education 7s of 2046 were traded 73 times. In the revenue bond sector, the New York City TFA 4s of 2036 were traded 106 times. And in the taxable bond sector, the Illinois 5.1s of 2033 were traded 56 times.

Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar increased $524.4 million to $6.57 billion on Monday. The total is comprised of $1.95 billion of competitive sales and $4.62 billion of negotiated deals.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.