Top-rated municipal bonds were stronger at mid-session, according to traders, who were looking ahead to a week in which $4.5 billion of bonds are slated to come to market.

Secondary Market

The 10-year benchmark muni general obligation yield fell as much as one basis point from 2.40% on Friday, while the yield on the 30-year GO was as much as one basis point lower from 3.18%, according to a read of Municipal Market Data's triple-A scale.

U.S. Treasuries were stronger on Monday. The yield on the two-year fell to 1.30% from 1.32% on Friday, while the 10-year Treasury yield dropped to 2.47% from 2.50%, and the yield on the 30-year Treasury bond decreased to 3.09% from 3.11%.

On Friday, the 10-year muni to Treasury ratio was calculated at 96.0%, compared with 95.8% on Thursday, while the 30-year muni to Treasury ratio stood at 102.2%, versus 101.9%, according to MMD.

MSRB: Previous Session's Activity

The Municipal Securities Rulemaking Board reported 34,961 trades on Friday on volume of $10.08 billion.

Previous Week's Top Underwriters

The top negotiated and competitive underwriters of last week included JPMorgan Securities, Morgan Stanley, RBC Capital Markets, Citigroup and Bank of America Merrill Lynch, according to Thomson Reuters data.

In the week of March 12 to March 18, JPMorgan underwrote $1.36 billion, Morgan Stanley $1.04 billion, RBC $707.6 million, Citi $597.3 million and BAML $434.2 million.

Prior Week's Actively Traded Issues

Revenue bonds comprised 58.69% of new issuance in the week ended March 17, up from 58.46% in the previous week, according to Markit. General obligation bonds comprised 35.64% of total issuance, down from 35.77%, while taxable bonds made up 5.67%, down from 5.77%.

Some of the most actively traded issues by type were from California, Wisconsin and Puerto Rico. In the GO bond sector, the Los Angeles, Calif., 3s of 2042 were traded 42 times. In the revenue bond sector, the Wisconsin Health and Educational Facilities Authority 4s of 2039 were traded 82 times. And in the taxable bond sector, the Employees Retirement System of the Government of the Commonwealth of Puerto Rico 6.15s of 2038 were traded 16 times.

Primary Market

This week's calendar is comprised of $2.94 billion of negotiated deals and $1.56 billion of competitive sales.

Bank of America Merrill Lynch is scheduled to price the week's largest deal – the New York State Environmental Facilities Corp.'s $594 million of state clean water and drinking water revolving fund revenue bonds for the New York City Municipal Water Finance Authority.

The Series 2017A and second resolution subordinated Series 2017F bonds are set to sell on Tuesday.

The deal is rated triple-A by Moody's Investors Service, S&P Global Ratings and Fitch Ratings.

Goldman Sachs is scheduled to price the Dutchess County Local Development Corp.'s $100.58 million of Series 2017 revenue refunding bonds for Vassar College on Tuesday.

The deal is rated Aa3 by Moody's and AA-minus by S&P.

Goldman is also set to price the Oregon Department of Administration Services' $239.32 million of tax-exempt and taxable state lottery revenue bonds for retail investors on Tuesday ahead of the institutional pricing on Wednesday.

The deal is rated Aa2 by Moody's and triple-A by S&P.

In the competitive arena, the San Francisco Unified School District will sell two deals totaling $239.9 million on Tuesday.

The offerings are composed of $180 million election of 2016 Series A general obligation bonds and $59.9 million of 2017 GO refunding bonds. Both sales are rated Aa2 by Moody's, AA-minus by S&P and triple-A by Fitch.

Bond Buyer Visible Supply

The Bond Buyer's 30-day visible supply calendar increased $1.32 billion to $10.07 billion on Monday. The total is comprised of $4.04 billion of competitive sales and $6.03 billion of negotiated deals.

BAML: Munis Outperform Treasuries, Corporates

Issuance for the year-to-date is $75.1 billion as of March 16, down 9.9% compared to the same period last year, according to a Bank of America Merrill Lynch Global Research report released on Monday.

According to BAML Municipal Research Strategist Sophie Yan, "51.1% of the total issuance for the year-to-date has been related to refundings, compared to 61.1% during the same period last year."

Municipals are outperforming both U.S. Treasury and corporate bonds, the report showed.

Year to date, the BAML Muni Master Index returned 0.568%, outperforming the Treasury Master Index which returned -0.092% and the U.S. Corporate IG Master Index which had a total return of 0.493%.

"The best performance in munis for the YTD has been in the 3-7 year maturities and the BBB-rated sector," Yan wrote.

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