Municipals were weaker at mid-session, traders said, as activity in the primary sector got underway.

Several large deals kicked off the action, with offerings from issuers in Kentucky, Texas and Wisconsin leading the way.

Secondary market
The yield on the 10-year benchmark muni general obligation rose as much as one basis point from 2.18% on Monday, while the 30-year GO yield increased as much as one basis point from 3.05%, according to a read of Municipal Market Data's triple-A scale.

U.S. Treasuries were stronger on Tuesday. The yield on the two-year Treasury fell to 1.26% from 1.28% on Monday, while the 10-year Treasury yield declined to 2.31% from 2.32%, and the yield on the 30-year Treasury bond decreased to 3.00% from 3.01%.

On Monday, the 10-year muni to Treasury ratio was calculated at 93.8%, compared with 93.9% on Friday, while the 30-year muni to Treasury ratio stood at 101.3%, versus 102.3%, according to MMD.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 37,419 trades on Monday on volume of $8.75 billion.

Primary market
Bank of America Merrill Lynch priced the Kentucky Economic Development Finance Authority’s $473.37 million of Series 2017 A and B hospital revenue refunding bonds for Owensboro Health on Tuesday.

The $434.72 million of Series 2017A bonds were priced as 5s to yield from 1.79% in 2018 to 3.98% in 2032. A split 2037 maturity was priced as 4s and 5s to yield 4.26%; a split 2041 maturity was priced as 5s to yield 4.34% and 5 1/4s to yield 4.24%; and a split 2045 maturity was priced as 4 1/8s and 5s to yield 4.38%.

The $38.66 million of Series 2017B bonds were priced as 5s to yield 3.90% in 2031 and 3.98% in 2032 and as 4s to yield 4.26% in 2037 and as 5s to yield 4.33% in 2040.

The deal is rated Baa3 by Moody’s Investors Service and BBB by Fitch Ratings except for the 2037 and 2045 maturities in Series 2017A and the 2037 maturity in Series 2017B, which are insured by Assured Guaranty Municipal and rated A2 by Moody’s and AA by S&P Global Ratings.

Since 2007, the Kentucky EDFA has issued roughly $3.51 billion of securities, with the most issuance occurring in 2009 when it sold roughly $769 million. The authority did not come to market at all in 2014 and has issued less than $100 million three other years during that time period.

Raymond James & Associates priced the Richardson Independent School District, Texas’ $199.09 million of Series 2017 unlimited tax school building bonds on Tuesday.

The issue was priced to yield from 1.03% with a 4% coupon in 2019 to 3.19% with a 5% coupon in 2039; a 2042 maturity was priced as 5s to yield 3.23%. A 2018 maturity was offered as a sealed bid.

The deal, backed by the Permanent School Fund guarantee program, is rated triple-A by Moody’s and S&P.

The state of Wisconsin is coming to market with $688.31 million of tax-exempt and taxable bonds in two separate sales on Tuesday.

Wells Fargo Securities priced the state’s $402.25 million of Series 2017C taxable general fund annual appropriation refunding bonds.

The deal was priced to yield from about 15 basis points above the comparable Treasury security in 2018 to about 85 basis points above the comparable Treasury security in 2027.

The deal is rated Aa3 by Moody’sand AA-minus by S&P and Fitch.

And JPMorgan Securities is expected to price the state’s $285.21 million of Series 2017-1 transportation revenue bonds.

This deal is rated Aa2 by Moody’s, AA-plus by S&P and Fitch and triple-A by Kroll Bond Rating Agency.

Bond Buyer visible supply
The Bond Buyer's 30-day visible supply calendar increased $177 million to $13.17 billion on Tuesday. The total is comprised of $3.84 billion of competitive sales and $9.33 billion of negotiated deals.

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