Top-quality municipal bonds finished weaker on Tuesday, traders said, as issuance was meager on Election Day.
Financial markets were open on Tuesday as voters across the United States were deciding the fate of over $70 billion of bond referendums, the most bonds up for approval since 2006.
Secondary Market
The yield on the 10-year benchmark muni general obligation rose one basis point to 1.71% from 1.70% on Monday, while the yield on the 30-year increased one basis point to 2.54% from 2.53%, according to the final read of Municipal Market Data's triple-A scale.
U.S. Treasuries were weaker on Tuesday. The yield on the two-year rose to 0.86% from 0.82% on Monday, the 10-year Treasury gained to 1.86% from 1.83% and the yield on the 30-year Treasury bond increased to 2.63% from 2.60%.
The 10-year muni to Treasury ratio was calculated at 91.7% on Tuesday compared to 93.1% on Monday, while the 30-year muni to Treasury ratio stood at 96.7% versus 97.3%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 32,103 trades on Monday on volume of $6.46 billion.
Primary Market
Supply for the week is estimated at $3.12 billion, comprised of $2.36 billion of negotiated deals and $758 million of competitive sales.
While most of the deals are set for sale Wednesday, one large offering came to market on Tuesday.
Bank of America Merrill Lynch priced the Chesapeake Bay Bridge and Tunnel District, Va.'s $324.03 million of Series 2016 first tier general resolution revenue bonds on Tuesday.
The issue was priced to yield 3.16% with a 5% coupon in 2041, 3.33% with a 5% coupon in 2046, 3.46% with a 5% coupon in 2051 and at par to yield 4.00% in 2055.
The deal is rated Baa2 by Moody's Investors Service and BBB by S&P Global Ratings except for the 2041 and 2055 maturities, totaling $113.14 million, which are insured by Assured Guaranty Municipal and rated A2 by Moody's and AA by S&P.
Morgan Stanley priced the Virginia Port Authority's $144.05 million of Series 2016A taxable port facilities revenue refunding bonds.
The issue was priced at par to yield from 1.308% in 2018 to 3.694% in 2031, 4.228% in 2036 and 4.478% in 2045. The deal is rated A1 by Moody's and A-minus by S&P.
Additionally, BAML priced the Virginia Port's $98.87 million of Series 2016B tax-exempt port facilities revenue refunding bonds, subject to the alternative minimum tax.
The issue was priced as 5s to yield from 1.14% in 2018 to 3.27% in 2036, 3.38% in 2041 and 3.42% in 2045. The deal is rated A1 by Moody's and A-minus by S&P.
Since 2006, the VPA has issued about $877.3 million of debt, with the most issuance prior to this year occurring in 2015, when it sold $200.6 million of bonds. The port authority did not come to market in 2008, 2009, 2013, or 2014.
On Wednesday, Morgan Stanley is set to price Mississippi's Series 2016A tax-exempt general obligation bonds.
The deal is rated AA by S&P.
Stifel is expected to price the Sacramento Area Flood Control Agency Consolidated Capital Assessment District No. 2, Calif.'s $220 million of Series 2016A tax-exempt assessment revenue bonds on Wednesday.
The deal is rated Aa3 by Moody's and ZAA by S&P.
Wells Fargo Securities is set to price Montgomery County, Texas' $141.43 million of Series 2016A unlimited tax road bonds and limited tax refunding bonds on Wednesday.
JPMorgan Securities is expected to price the New Jersey Educational Facilities Authority's $137 million of Series 2016B&C higher education capital improvement fund issue bonds on Wednesday.
The deal is rated A3 by Moody's and A-minus by S&P and Fitch Ratings.
Citigroup is set to price the Bristol, Tenn., Industrial Development Board's $122 million of Series 2016A state sales tax revenue bonds and Series 2016B sales tax revenue capital appreciation bonds for the Pinnacle Project on Wednesday.
