Top quality municipal bonds were stronger in early activity on Tuesday, traders said, as yields weakened to near record low levels.
The yield on 10-year benchmark muni general obligation was from two to four basis points weaker from 1.51% on Monday, while the 30-year muni yield was from three to five basis points weaker from 2.22%, according to an early read of Municipal Market Data's triple-A scale.
U.S. Treasuries were narrowly mixed on Tuesday. The yield on the two-year Treasury was unchanged from 0.71% on Monday, while the 10-year Treasury yield dropped to 1.59% from 1.61% and the yield on the 30-year Treasury bond decreased to 2.40% from 2.43%.
On Monday, the yield on 10-year muni is now only four basis points above its all-time low of 1.47% set back in 2012. On Friday, June 10, the yield on 30-year muni dropped to its fourth straight record low.
The 10-year muni to Treasury ratio was calculated at 93.5% on Monday compared to 92.9% on Friday, while the 30-year muni to Treasury ratio stood at 91.3% versus 90.7%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 32,557 trades on Monday on volume of $10.59 billion.
Primary Market
The New York State Environmental Facilities Corp. is coming to market with $490.6 million of Series 2016A state clean water and drinking water revolving funds revenue bonds.
Goldman Sachs is set to price the NYS EFC's issue, New York City Municipal Water Finance Authority Projects Second Resolution bonds, for institutions after a one-day retail order period.
The bonds were priced for retail to yield from 0.68% with 2% and 5% coupons in a split 2018 maturity to 2.42% with a 4% coupon in 2036; a 2046 term bond was priced as 2 5/8s to yield 2.72%. A 2017 maturity was offered as a sealed bid. No retail orders were taken in the 2027-2030, 2032-2035, 2041 and 2045 maturities.
The deal is rated triple-A by Moody's Investors Service and S&P Global Ratings and AA-plus by Fitch Ratings.
Since 2006, the NYS EFC has issued about $7.4 billion of debt, with the largest issuance occurring in 2012 when it sold roughly $1.1 billion of securities. The corporation has only sold more than $1 billion a year twice since 2006 and saw a low year of issuance in 2010 when they came with $505 million.
JPMorgan Securities is set to price the Metropolitan Washington Airports Authority's $375 million of Series 2016A AMT and Series 2016B non-AMT airport system revenue refunding bonds. The deal is rated A1 by Moody's and AA-minus by S&P and Fitch.
Barclays Capital is expected to price Cook County, Ill.'s $300 million of Series 2016A GO refunding bonds on Tuesday. The deal is rated A2 by Moody's, AA-minus by S&P and A-plus by Fitch.
JPMorgan is expected to price the California Infrastructure and Economic Development Bank's $138.41 million of Series 2016A infrastructure state revolving fund revenue bonds on Tuesday. The deal is rated Aa1 by Moody's and triple-A by S&P and Fitch.
In the competitive arena on Tuesday, the Florida State Board of Education will sell $145.41 million of Series 2016C public education capital outlay refunding bonds. The deal is rated Aa1 by Moody's and triple-A by S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $219.9 million to $10.42 billion on Tuesday. The total is comprised of $4.75 billion of competitive sales and $5.66 billion of negotiated deals.
