Top-quality municipal bonds were weaker in early activity, traders said, with yields on some maturities strengthening by as much as three basis points.
In the primary, traders will see more supply hit the market on Tuesday, a day after the Florida Hurricane Catastrophe Fund sold more than $1 billion of taxable bonds.
Secondary Market
The yield on the 10-year benchmark muni general obligation was one to three basis points stronger from 1.68% on Monday, while the 30-year muni yield was as much as two basis points stronger from 2.78%, according to a read of Municipal Market Data's triple-A scale.
Treasuries were lower on Tuesday. The yield on the two-year Treasury rose to 0.77% from 0.76% on Monday, while the 10-year Treasury yield gained to 1.80% from 1.76% and the 30-year Treasury bond yield increased to 2.66% from 2.62%.
The 10-year muni to Treasury ratio was calculated on Monday at 95.3% compared to 95.0% on Friday, while the 30-year muni to Treasury ratio stood at 106.2% versus 105.7%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 35,455 trades on Monday on volume of $5.89 billion.
Primary Market
Late Monday, JPMorgan Securities priced the Florida State Board of Administration Finance Corp.'s $1.2 billion of Series 2016A taxable revenue bonds at par to yield 2.163% in 2019, about 125 basis points over the comparable Treasury security; and to yield 2.638% in 2021, about 140 basis points over the comparable Treasury security.
Florida bond director Ben Watkins told The Bond Buyer he was very pleased with the sales' results.
"The plus 140 on the 2021s were right on top of where we were in the 2013 sale," Watkins said.
The relative market stability made it a good time to go early in the week, he said, adding, "It's always better to be first than last."
He said everything went smoothly.
"We were very pleased with the process. The deal went well and we were pleased to place all the $1.2 billion of bonds that we set out to sell."
The bonds are rated Aa3 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings.
On Tuesday, Jefferies is set to price New York City's $800.02 million of Fiscal 2016 Series C and D general obligation bonds for institutions.
The $750 million of Series C bonds were repriced on Monday for retail to yield from 0.80% with 3% and 5% coupons in a split 2019 maturity to 2.16% with a 5% coupon in 2027 and from 2.63% with a 5% coupon in 2033 to 3% with a 4% coupon in 2035. The 2017 and 2018 maturities were offered as sealed bids and no retail orders were taken in the 2028-2032 maturities. The $50.02 million of Series D bonds were repriced for retail to yield from 0.80% with a 3% coupon in 2019 to approximately 3.138% with a 3% coupon in 2035; the 2016-2018 maturities were offered as sealed bids.
The issue is rated Aa2 by Moody's Investors Service and AA by Standard & Poor's and Fitch Ratings.
Bank of America Merrill Lynch is set to price the University of North Carolina at Chapel Hill's $401 million of taxable Series 2016C general revenue refunding bonds on Tuesday. The deal is rated triple-A by Moody's, S&P and Fitch.
Baltimore County, Md., will competitively sell three issues totaling about $255 million on Tuesday. The deals will consist of $112 million of Series 2016 consolidated public improvement bonds, $88 million of 78th issue Metropolitan District bonds and $54.87 million of Series 2016 Metropolitan District refunding bonds. All three sales are rated triple-A by Moody's S&P and Fitch.
Ohio will competitively sell five issues totaling $306 million on Tuesday. The deals will consist of $112.54 million of Series 2016A common schools GO refunding bonds, $100 million of Series 2016A taxable Third Frontier Research and Development GOs, $63.88 million of Series 2016A infrastructure improvement GO refunding bonds, $17.28 million of Series 2016A conservation projects GO refunding bonds, and $12 million of Series N coal development GOs. All five issues are rated Aa1 by Moody's and AA-plus by S&P and Fitch.
Highland Park Independent School District, Texas, will competitively sell $203.05 million of Series 2016 unlimited tax school building bonds on Tuesday.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $668.4 million to $9.04 billion on Monday. The total is comprised of $3.27 billion of competitive sales and $5.77 billion of negotiated deals.
