Municipal bonds slipped as the last few new issues hit screens before a mini break tomorrow, as investors await the decision of the Federal Reserve monetary policymakers.
Yields on some maturities were as much as five basis points higher, traders said.
Secondary Market
The yield on the 10-year benchmark muni general obligation rose as much as three basis points from 1.95% on Monday, while the 30-year yield was as many as five basis points higher from 2.84% on Monday, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasury bonds slumped on Tuesday morning as the yield on the two-year rose to 0.96% from 0.94% on Monday, while the 10-year yield increased to 2.26% from 2.23%, and the 30-year Treasury jumped to 3.00% from 2.96%.
The 10-year muni to Treasury ratio was calculated on Monday at 87.4% compared to 89.9% on Friday, while the 30-year muni to Treasury ratio stood at 95.9% compared to 97.3%, according to MMD.
Primary Market
Tuesday will be the big day in the primary market this week as underwriters and dealers seek to wrap up business before the Fed announcement on Wednesday. The Federal Open Market Committee is expected to increase the federal funds target rate by 25 basis points from near zero after the meeting.
Jacksonville, Fla., competitively sold $200.265 million of transportation refunding revenue bonds, as Wells Fargo Securities won the bidding war with a true interest cost of 3.2%. The bonds were priced to yield from 0.60% with a 3% coupon in 2016 to 3.634% with a 3.5% coupon in 2037. The deal is rated A1 by Moody's and AA-minus by Standard & Poor's and Fitch.
The last time the city competitively sold comparable bonds was on Sept. 5, 2007, when Merrill Lynch won $100.68 million of Series 2007 transportation revenue bonds with a true interest cost of 4.75%.
Since 2005, Jacksonville has issued 3.12 billion of debt. The years of 2008 and 2012 saw the most issuance with $570 million and $952 million, respectively. The years of 2005 and 2006 were low years, when the River City issued $45 million and $69 million, respectively. Jacksonville has been to market an average of 3.3 times per year during since 2005.
RBC Capital Markets priced the Spring Independent School District in Harris County, Texas' $139.68 million of Series 2015 unlimited tax refunding bonds on Tuesday. The bonds are priced to yield from 1.22% with a 5% coupon in 2019 to 3.04% with a 4% coupon in 2033. The 2016 maturity was offered as a sealed bid. The deal is wrapped by Permanent School Fund Guarantee Program and is rated triple-A by both Moody's and S&P.
Barclays Capital is slated to price Utah Housing Corp.'s $100 million of Series 2015D single-family mortgage bonds on Thursday. The bonds are rated Aa3 by Moody's.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 32,017 trades on Monday on volume of $5.001 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $57.3 million to $4.38 billion on Tuesday. The total is comprised of $1.29 million competitive sales and $3.09 billion of negotiated deals.
