Top-rated municipal bonds were stronger at mid-session, according to traders, as market prepared to see some supply hit the screens, led off by issuers in Indiana and Florida.

Secondary market
The yield on the 10-year benchmark muni general obligation fell as much as one basis point from 1.90% on Tuesday, while the 30-year GO yield dropped as much as two basis points from 2.75%, according to a read of Municipal Market Data's triple-A scale.

Treasuries were stronger on Wednesday. The yield on the two-year Treasury dipped to 1.31% from 1.32% on Tuesday, the 10-year Treasury yield declined to 2.19% from 2.21% and the yield on the 30-year Treasury bond decreased to 2.77% from 2.79%.

On Tuesday, the 10-year muni-to-Treasury ratio was calculated at 85.9%, compared with 87.2% on Monday, while the 30-year muni-to-Treasury ratio stood at 98.6% versus 99.5%, according to MMD.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 38,779 trades on Tuesday on volume of $11.54 billion.

Primary Market
In the competitive arena, the Florida Board of Education sold $260.02 million of Series 2017B full faith and credit public education capital outlay refunding bonds.

Citigroup won the bonds with a true interest cost of 2.82%.

The bonds were priced to yield from 0.76% with a 5% coupon in 2018 to 3.20% with a 3.5% coupon in 2038.

The deal is rated Aa1 by Moody’s and AAA by S&P and Fitch.

Bank of America Merrill Lynch priced Tampa-Hillsborough County Expressway Authority’s $158.44 million of revenue bonds.

The issue was priced and repriced as 5s to yield 3.15% in a 2047 bullet maturity.

The deal is rated A2 by Moody’s and A-plus by S&P.

Morgan Stanley priced the Oregon Transportation Department’s $132.64 million of highway user tax revenue refunding senior lien bonds.

The bonds were priced to yield from 0.79% with a 5% coupon in 2018 to 1.85% with a 5% coupon in 2026.

The deal is rated Aa1 by Moody’s, triple-A by S&P and AA-plus by Fitch.

Goldman Sachs is set to price the Indiana Finance Authority’s $178.5 million of highway revenue refunding bonds.

The deal is rated Aa1 by Moody’s Investors Service and AA-plus by S&P Global Ratings and Fitch Ratings.

Since 2007, the IFA has sold $17.76 billion of securities, with the most issuance occurring in 2011 when it sold $2.58 billion. Prior to this year, the authority sold the least amount in 2014 when it offered $887 million.

Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar decreased $1.68 billion to $10.23 billion on Wednesday. The total is comprised of $3.04 billion of competitive sales and $7.20 billion of negotiated deals.

Moody’s: VRDB, CP transactions steady in Q2
In the second quarter of 2017, banks committed over $11 billion of credit and liquidity support for variable-rate demand bonds and commercial paper transactions, according to a report issued Wednesday by Moody’s Investors Service.

The data are based on securities which are rated by Moody’s.

“New issuance and substitutions of existing facilities accounted for 37% of the overall dollar volume of banks’ commitments in the second quarter of 2017, up from 28% in the first quarter, while same-bank extensions of credit and liquidity facilities made up the remaining 63%, down from 72% in the first quarter,” Moody’s said.

Almost 83% of new banks facilities issued in the second quarter were related to commercial paper programs.

“The lower amount of same-bank extensions in the second quarter reflects a low volume of facility expirations and substitutions during the quarter, in part due to an increase in the issuance of facilities with longer maturities during the last two years,” Moody’s said.

Three-years and longer were the most popular commitments in the second quarter, based on the aggregate amount pledged, Moody’s said, adding that the issuance volume of new-rated tender option bond trusts was notably higher than in the first quarter of the year.

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