Top-rated municipal bonds were stronger in early activity, according to traders with yields on some maturities fall by as much as five basis points.
The yield on the 10-year benchmark muni general obligation fell three to five basis points from 2.51% on Monday, while the yield on the 30-year dropped three to five basis points from 3.32%, according to an early read of Municipal Market Data's triple-A scale.
U.S. Treasuries were narrowly mixed on Tuesday. The yield on the two-year Treasury was unchanged from 1.12% on Monday, the 10-year Treasury rose to 2.39% from 2.38%, while the yield on the 30-year Treasury bond increased to 3.06% from 3.05%.
On Monday, the 10-year muni to Treasury ratio was calculated at 105.2% compared to 106.3% on Friday while the 30-year muni to Treasury ratio stood at 108.7% versus 108.8%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 53,701 trades on Monday on volume of $11.61 billion.
Primary Market
This week, New York City is coming to market with over $1 billion of general obligation bonds in negotiated and competitive offerings.
On Monday, Jefferies opened a two-day retail order period on NYC's $803.87 million of Fiscal 2008 and 2017 bonds before the institutional pricing on Wednesday.
The $650 million of Fiscal 2017 Subseries B-1 bonds were priced for retail to yield from 1.92% with a 5% coupon in 2020 to 3.77% with a 5% coupon in 2037. The 2018 and 2019 maturities were offered as sealed bids. A 2043 maturity was priced as 4s to yield approximately 4.12%. No retail orders were taken in the 2031-2034 or 2041 maturities.
The $67.03 million of Fiscal 2008 Subseries J-7 bonds were priced for retail to yield 1.92% with 4% and 5% coupons in a split 2020 maturity and 2.19% with 4% and 5% coupons in a split 2021 maturity.
The $86.84 million of Fiscal 2008 Subseries J-9 bonds were priced for retail to yield 2.87% with 4% and 5% coupons in a split 2025 maturity, and 3% with a 5% coupon and at par in a split 2026 maturity, and 3.10% with 4% and 5% coupons in a split 2027 maturity.
On Tuesday, NYC will competitively sell $200 million of taxable GOs in two separate offerings.
The deals are rated Aa2 by Moody's Investors Service and AA by S&P Global Ratings and Fitch Ratings.
William Blair & Co. is set to price Connecticut's $328.38 million of Series 2016G GO refunding bonds on Tuesday for institutions after holding a one-day retail order period on Monday.
The issue was priced for retail to yield from 1.57% with 3% and 4% coupons in a split 2018 maturity to 2.80% with a 3% coupon in 2023. A 2017 maturity was offered as a sealed bid.
The deal is rated Aa3 by Moody's and AA-minus by S&P, Fitch and Kroll Bond Rating Agency.
On Tuesday, Bank of America Merrill Lynch is set to price the Massachusetts Department of Transportation's $445 million of Series 2016A metropolitan highway system senior revenue refunding bonds. The deal is rated A3 by Moody's and A-plus by S&P and Fitch.
BAML is also set to price Massachusetts DOT's $197 million of Series 2016A metropolitan highway system revenue refunding bonds, subordinated commonwealth contract assistance secured, on Tuesday. This deal is rated Aa2 by Moody's and AA-plus by S&P and Fitch.
JPMorgan is expected to price the Phoenix Civic Improvement Corp., Ariz.'s $381 million of Series 2016 junior lien water system revenue refunding bonds on Tuesday. The deal is rated Aa2 by Moody's and triple-A by S&P.
Since 2006, the Phoenix CIC has sold roughly $5.3 billion of securities, with the highest issuance occurring in 2014 when it sold $726 million. The corporation saw a low year of issuance in 2012, when it issued $66 million. The sale on Tuesday puts the CIC over $600 million for the year.
RBC Capital Market is set to price the Minneapolis-St. Paul Metropolitan Airports Commission's $226 million of Series 2016C non-AMT senior airport revenue bonds and Series 2016D AMT subordinate airport revenue bonds on Tuesday. The senior bonds are rated AA-minus by S&P and Fitch and the subordinate bonds are rated A-plus by S&P and Fitch.
In the competitive arena on Tuesday, Portland, Ore., will sell $171.02 million of Series 2016A first lien water system revenue and refunding bonds. The deal is rated triple-A by Moody's.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $23.5 million to $15.06 billion on Tuesday. The total is comprised of $3.62 billion of competitive sales and $11.44 billion of negotiated deals.
