Top-rated municipal bonds were weaker at mid-session, according to traders, who were returning to their desks after the three day holiday weekend.
The yield on the 10-year benchmark muni general obligation on Tuesday rose one to three basis points from 1.64% on Friday, while the yield on the 30-year increased two to four basis points from 2.45%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were weaker on Tuesday. The yield on the two-year Treasury rose to 0.86% from 0.84% on Friday, the 10-year Treasury yield gained to 1.75% from 1.74% and the yield on the 30-year Treasury bond increased to 2.48% from 2.47%.
On Friday, the 10-year muni to Treasury ratio was calculated at 94.7% compared to 94.3% on Thursday, while the 30-year muni to Treasury ratio stood at 99.3% versus 99.7%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 31,472 trades on Friday on volume of $12.75 billion.
Prior Week's Actively Traded Issues
Revenue bonds comprised 57.47% of new issuance in the week ended Oct. 7, up from 57.27% in the previous week, according to Markit. General obligation bonds comprised 36.79% of total issuance, down from 37.00%, while taxable bonds made up 5.74%, up from 5.73%.
Some of the most actively traded issues by type were from Massachusetts, New York and California. In the GO bond sector, the Massachusetts 2s of 2017 were traded 33 times. In the revenue bond sector, the New York Metropolitan Transportation Authority 2s of 2017 were traded 33 times. And in the taxable bond sector, the California 7.6s of 2040 were traded 24 times.
Previous Week's Top Underwriters
The top negotiated and competitive underwriters of last week included JPMorgan Securities, Citigroup, Morgan Stanley, Bank of America Merrill Lynch and Barclays, according to Thomson Reuters data. In the week of Oct. 2-Oct. 8, JPMorgan underwrote $1.21 billion, Citi $2.15 billion, Morgan Stanley $2 billion, BAML $1.51 billion and Barclays $629.8 million.
Primary Market
Volume for the week is estimated at $8.41 billion, consisting of $7.58 billion of negotiated deals and $834.80 million of competitive sales.
On Wednesday, Raymond James & Associates is expected to price the Cypress-Fairbanks Independent School District, Texas' $426.76 million of unlimited tax school building and refunding bonds.
The deal is backed by the Permanent School Fund guarantee program and rated triple-A by Moody's Investors Service and S&P Global Ratings.
Also on Wednesday, Bank of America Merrill Lynch is slated to price the Charlotte-Mecklenburg Hospital Authority, N.C.'s $381 million of Series 2016A healthcare revenue refunding bonds for the Carolinas Healthcare System. The deal is rated Aa3 by Moody's and AA-minus by S&P.
In the competitive arena on Wednesday, the Campbell County Sanitation District No. 1, Ky., is selling $138.02 million of Series 2016 revenue refunding bonds. The deal is rated Aa3 by Moody's and AA by S&P.
On Thursday, Bank of America Merrill Lynch is slated to price the state of Illinois' $1.35 billion of Series of October 2016 general obligation refunding bonds.
The deal is rated Baa2 by Moody's, triple-B by S&P and BBB-plus by Fitch Ratings.
Also on Thursday, Citigroup is set to price the Great Lakes Water Authority, Mich.'s $1.32 billion deal consisting of $899 million of Series 2016 A, B, C & D water supply system senior lien and second lien revenue and revenue refunding bonds and $416 million of Series 2016 B & C sewage disposal system senior lien and second lien revenue refunding bonds.
Ahead of the sale, Moody's upgraded the senior liens to A3 from Baa1 and the second liens to Baa1 from Baa2 while Fitch upgraded the senior liens to A from BBB and the second lien to A-minus from BBB-minus. S&P affirmed its A-minus rating on the senior lien bonds and the BBB-plus rating on the second lien bonds.
JPMorgan Securities is expected to price the Maricopa County Industrial Development Authority, Ariz.'s $766.14 million revenue bonds for Banner Health on Thursday. The deal is rated AA-minus by S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.37 billion to $17.35 billion on Tuesday. The total is comprised of $5.64 billion of competitive sales and $11.71 billion of negotiated deals.
