Top-rated municipal bonds were stronger at mid-session, according to traders, who were awaiting word on interest rates from the Federal Reserve.
The Federal Open Market Committee is set to announce if it changed its federal funds target rate at the conclusion of its meeting this afternoon. Most Fed watchers expect the FOMC to take no action now, but hike rates by 25 basis points at its next meeting on Dec. 13-14.
Secondary Market
The yield on the 10-year benchmark muni general obligation dropped one to three basis points from 1.74% on Tuesday, while the yield on the 30-year was as much as two basis points lower, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were narrowly mixed on Wednesday. The yield on the two-year slipped to 0.82% from 0.83% on Tuesday, the 10-year Treasury declined to 1.81% from 1.82% and the yield on the 30-year Treasury bond was unchanged from 2.57%.
On Tuesday, the 10-year muni to Treasury ratio was calculated at 95.6% compared to 94.5% on Monday, while the 30-year muni to Treasury ratio stood at 99.6% versus 99.0%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 34,983 trades on Tuesday on volume of $9.77 billion.
Primary Market
Municipal bond traders are seeing some more supply head their way on Wednesday.
Raymond James & Associates priced the Virginia Resource Authority's $146.77 million of Series 2016C infrastructure revenue bonds under the state's Pooled Financing Program.
The issue was priced to yield from 0.88% with a 5% coupon in 2018 to 3.37% with a 3.25% coupon in 2038; a 2041 maturity was priced as 4s to yield 3.01% and a 2046 maturity was priced as 4s to yield 3.06%. A 2017 maturity was offered as a sealed bid.
The deal is rated triple-A by Moody's Investors Service and S&P Global Ratings.
RBC Capital Markets is set to price the Connecticut Housing Finance Authority's $170.34 million of housing mortgage finance program bonds in five series.
The deal is rated triple-A by Moody's and S&P.
Since 2006, the CHFA has sold about $6.6 billion of securities, with the largest issuance coming in 2008 when the authority sold $905 million of debt. The CHFA's lowest issuance was in 2013, when it sold just $232 million. The latest sale will put the authority over $700 million for the year, the highest yearly total since 2012.
Bank of America Merrill Lynch is expected to price the South Carolina Jobs-Economic Development Authority's $101 million of Series 2016 hospital refunding revenue bonds for the Anmed Health project. The deal is rated A-plus by S&P and Fitch Ratings.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $3.57 billion to $9.62 billion on Wednesday. The total is comprised of $2.44 billion of competitive sales and $7.18 billion of negotiated deals.
