Top quality municipal bonds were stronger at mid-session, according to traders, who were seeing a second wave of new issuance hit the market.

Secondary Market

The 10-year benchmark muni general obligation yield fell as much as two basis points from 2.22% on Tuesday, while the yield on the 30-year GO dropped two to four basis points from 2.97%, according to a read of Municipal Market Data's triple-A scale.

U.S. Treasuries were stronger on Wednesday. The yield on the two-year Treasury dropped to 1.18% from 1.19% on Tuesday, while the 10-year Treasury yield decreased to 2.36% from 2.38%, and the yield on the 30-year Treasury bond declined to 2.95% from 2.97%.

On Tuesday, the 10-year muni to Treasury ratio was calculated at 93.3% compared to 93.9% on Monday, while the 30-year muni to Treasury ratio stood at 100.0%, versus 100.4%, according to MMD.

MSRB: Previous Session's Activity

The Municipal Securities Rulemaking Board reported 42,267 trades on Tuesday on volume of $9.10 billion.

Primary Market

In the competitive sector, the Highline School District No. 401, Wash., sold $206.895 million of Series 2017 unlimited tax general obligation bonds. Bank of America Merrill Lynch won the bonds with a true interest cost of 3.29%.

The issue was priced as 5s to yield 0.90% in 2017 and 1.17% in 2018 and from 2.07% with a 5% coupon in 2023 to 3.41% with a 4% coupon in 2036. The deal, backed by the Washington state credit enhancement program, is rated Aa1 by Moody's Investors Service and AA-plus by S&P Global Ratings.

Seattle, Wash., competitively sold $189.67 million of Series 2017 water system improvement and refunding revenue bonds.

Citigroup won the bonds with a TIC of 3.28%. Pricing information was not immediately available. The deal is rated Aa1 by Moody's and AA-plus by S&P.

In the negotiated sector on Wednesday, Morgan Stanley priced the Regents of the University of Michigan's $469.03 million of Series 2017A general revenue bonds.

The issue was priced to yield from 0.95% with a 5% coupon in 2018 to 2.97% with a 5% coupon in 2037. A term bond in 2042 was priced to yield 3.05% with a 5% coupon and a term bond in 2047 was priced to yield 3.10% with a 5% coupon in 2047. The deal is rated triple-A by Moody's and S&P.

Since 2007, the University of Michigan Regents has issued about $2.71 billion of debt, with the largest issuance occurring in 2010 when it sold roughly $567 million of debt. The school did not come to market at all in 2011 or 2016. Wednesday's sale will mark the highest issuance since 2012.

BAML priced the Orange County Water District, Calif.'s $118.62 million of Series 2017A tax-exempt and Series 2017B taxable refunding revenue bonds.

The $93.34 million of Series 2017A tax-exempts were priced to yield from 0.85% with a 3% coupon in 2018 to 3.44% with a 4% coupon in 2037; a 2041 maturity was priced as 4s to yield 3.51%. The $25.28 million of Series 2017B taxables were priced at par to yield from 0.82% in 2017 to 3.77% in 2031, 3.978% in 2036 and 4.078% in 2041. The deal is rated triple-A by S&P and Fitch.

Barclays Capital priced the California Statewide Community Development Authority's $135 million of Series 2006 C&D pollution control refunding revenue bonds as a remarketing.

The $67.5 million of Series 2006C bonds were priced at par to yield 2.625% in 2033. The $67.5 million of Series 2006D bonds were priced at par to yield 2.625% in 2033. The deal is rated Aa3 by Moody's, A by S&P and A-plus by Fitch.

RBC Capital Markets priced $203.67 million Aurora Public Schools, Joint School District No. 28J in Adams and Arapahoe Counties, Colo., Series 2017A GOs and Series 2017B GOs.

The $200 million of Series 2017A GOs were priced to yield from 0.93% with a 4% coupon in 2017 to 2.58% with a 5% coupon in 2028 and as 5s to yield from 2.73% in 2030 to 3.09% in 2036. The $3.67 million of Series 2017B GO refunding bonds were priced as 5s to yield 1.61% in 2020.

The deal, backed by the Colorado state intercept program, is rated Aa2 by Moody's and AA by Fitch.

RBC also priced the Pennsylvania Housing Finance Agency's $239.65 million of Series 2017-122 single-family mortgage revenue bonds, not subject to the alternative minimum tax.

The issue was priced at par to yield from 2.05% in 2021 to 3.15% and 3.25% in a split 2028 maturity; a 2032 maturity yields 3.65%, and a 2036 maturity yields 3.90%. A 2046 maturity was priced as 4s to yield about 2.47% as a PAC bond with an average life of 4.5 years. The deal is rated Aa2 by Moody's and AA-plus by S&P.

Morgan Stanley is expected to price the U.S. Virgin Islands Public Finance Authority's $216.35 million of Series 2016A senior lien working capital bonds and Series 2016B subordinate lien working capital bonds. The deal is rated BB by S&P Global Ratings and Fitch Ratings.

Piper Jaffray is expected to price the University of Connecticut's $300 million of Series 2017A GOs on Wednesday. The deal is rated Aa3 by Moody's and AA-minus by S&P and A-plus by Fitch.

Bank of America Merrill Lynch is set to price the Illinois Finance Authority's $198 million of Series 2017A revenue bonds for Edward-Elmhurst Healthcare on Wednesday. The deal is rated A by S&P and Fitch.

Bond Buyer Visible Supply

The Bond Buyer's 30-day visible supply calendar decreased $2.18 billion to $15.83 billion on Wednesday. The total is comprised of $3.80 billion of competitive sales and $12.03 billion of negotiated deals.

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