Top-rated municipal bonds were stronger at mid-session, according to traders, who were seeing the first of the week's new issuance hit the market.
The yield on the 10-year benchmark muni general obligation fell as much as one basis point from 2.23% on Monday, while the 30-year GO yield dropped as much two basis points from 3.03%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were narrowly mixed on Tuesday. The yield on the two-year rose to 1.25% from 1.24% on Monday, while the 10-year Treasury yield was unchanged from 2.35%, and the yield on the 30-year Treasury bond increased to 2.99% from 2.98%.
On Monday, the 10-year muni to Treasury ratio was calculated at 95.1% compared to 93.9% on Friday, while the 30-year muni to Treasury ratio stood at 101.6%, versus 101.0%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,929 trades on Monday on volume of $9.55billion.
On Tuesday, Goldman Sachs priced San Antonio, Texas' $308.94 million of New Series 2017 electric and gas systems revenue and refunding bonds.
The issue was priced as 5s to yield from 1.07% in 2019 to 1.44% in 2021 and from 2.33% in 2026 to 3.21% in 2038. A split 2042 maturity was priced as 5s to yield 3.26% and as 4s to yield 3.63% and a split 2047 maturity was priced as 5s to yield 3.31% and as 4s to yield 3.68%. A 2018 maturity was offered as a sealed bid.
The deal is rated Aa1 by Moody's Investors Service, AA by S&P Global Ratings and AA-plus by Fitch Ratings.
Since 2007, San Antonio has sold about $13 billion of bonds, with the most issuance occurring in 2012 when it offered $2.05 billion of debt. The Alamo City saw a low year of issuance in 2011, when it sold $411 million – one of only three times in that period it has not sold more than $1 billion in a calendar year.
In the biggest splash of the week, the state of Massachusetts plans to come to market with over $1 billion of bonds in two separate negotiated deals that are heavily loaded with green bonds.
On Tuesday, Bank of America Merrill Lynch priced the Massachusetts' Clean Water Trust's $305.02 million of state revolving fund Series 20 green bonds and Series 2017 refunding bonds for retail investors ahead of the institutional pricing on Wednesday.
The $207.78 million of Series 20 green bonds were priced as 5s to yield from 1.20% in 2020 to 2.59% in 2031 and 3.03% in 2042. The 2018 and 2019 maturities were offered as sealed bids. No retail orders were taken in the 2032-2037 or 2042 maturities.
The $97.24 million of refunding bonds were priced as 5s to yield from 1.46% in 2021 to 2.68% in 2029.
The deal is rated triple-A by Moody's, S&P and Fitch.
Citigroup is expected to price the state's $778 million general obligation bond offering on Thursday. The deal is comprised of $400 million of Series 2017A GO, $278 million of Series 2017C refunding bonds and $100 million of Series 2017B GO green bonds.
That deal is rated Aa1 by Moody's and AA-plus by S&P and Fitch.
Since 2013, U.S. issuers have sold almost $15.5 billion of green bonds, according to ICE Data Services. Most of the issuance occurred in 2016 when over $7.5 billion of green bonds were sold.
Since there is no official regulatory definition, ICE said it characterizes green bonds "by the issuer (and [as] stated in the OS), these bonds are issued to fund environmentally beneficial projects such as reducing the impact of, or adapting to, climate change, clean water/drinking water, advance renewable energy, energy efficiency, acquisition of land, preservation and habitat restoration, more efficient and less polluting transportation, and other environmental-related projects."
Citigroup priced the state of Oregon's $328.57 million of Series I, J, and L higher education GOs on Tuesday.
The $125.9 million of Series 2017I bonds were priced as 5s to yield from 1.10% in 2019 to 3.38% in 2037. A 2018 maturity was offered as a sealed bid.
The $55.51 million of Series 2017J bonds were priced to yield from 1.10% with a 3% coupon in 2019 to 3.08% with a 5% coupon in 2037; a 2042 maturity was priced as 5s to yield 3.15%. A 2018 maturity was offered as a sealed bid.
The $148.17 million of Series 2017L bonds were priced as 5s to yield from 1.10% in 2019 to 3.08% in 2037 and 3.15% in 2042. A 2018 maturity was offered as a sealed bid.
The deal is rated Aa1 by Moody's and AA-plus by S&P and Fitch.
RBC Capital Markets is expected to price the San Joaquin County Transportation Authority, Calif.'s $207.77 million of Series 2017 Measure K sales tax revenue refunding bonds on Tuesday.
The deal is rated AA by S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $248.6 million to $12.59 billion on Tuesday. The total is comprised of $3.39 billion of competitive sales and $9.20 billion of negotiated deals.