Municipal bond traders saw the first of the week’s new supply hit the screens on Monday as they watched to see how Congress was tackling tax reform.

Ipreo estimates bond volume for the week at $9.897 billion, which consists of $6.644 billion of negotiated deals and $3.253 billion of competitive sales. In secondary trading, municipal bonds finished weaker.

Primary market
Barclays Capital priced the New York City Municipal Water Finance Authority’s $398.12 million of Fiscal 2018 Series CC water and sewer system second general resolution revenue bonds for retail investors ahead of the institutional pricing on Tuesday.

The $338.44 million of Subseries CC-1 bonds were priced as 3s to yield approximately 3.103% in 2037. A triple-split 2048 maturity was priced as 4s to yield 3.14% and as 5s to yield 2.86%; the last tranche was not offered to retail.

The $59.68 million of Subseries CC-2 bonds were priced as 5s to yield 1.53% in a split 2024 maturity and 1.63% in a split 2025 maturity. The other halves of the 2034 and 2025 maturities were not offered to retail.

Proceeds from the sale will be used to fund capital projects and refund outstanding debt, the NYC MWFA said.

The deal is rated Aa1 by Moody’s Investors Service and AA-plus by S&P Global Ratings and Fitch Ratings.

On Tuesday, Citigroup is slated to price the Metropolitan Pier and Exposition Authority’s $475 million of McCormick Place expansion project bonds and refunding bonds.

The issue is composed of Series 2017A bonds and Series 2017B and 2018A refunding bonds. The deal is rated BB-plus by S&P and BBB-minus by Fitch.

JPMorgan Securities is expected to price Norfolk, Va.’s $153.2 million of Series 2017A capital improvement bonds and Series 2017B taxable GO refunding bonds on Tuesday. The deal is rated Aa2 by Moody’s and AA-plus by S&P and Fitch.

Siebert Cisneros Shank is set to price Tallahassee, Fla.’s $115.17 million of Series 2017 consolidated utility systems refunding bonds on Tuesday. The deal is rated AA by S&P and AA-plus by Fitch.

In the competitive arena, Washington State will sell $505.81 million of Series R-2018C various purpose general obligation refunding bonds on Tuesday. The deal is rated Aa1 by Moody’s and AA-plus by S&P and Fitch.

Also on Tuesday, Wisconsin is set to sell $277.71 million of Series 2017B GOs. The deal is rated AA by S&P and AA-plus by Fitch.

Secondary market
The yield on the 10-year benchmark muni general obligation rose one basis point to 1.99% from 1.98% on Friday, while the 30-year GO yield rose gained basis point to 2.69% from 2.68%, according to the final read of Municipal Market Data's triple-A scale.

U.S. Treasuries were mixed on Monday. The yield on the two-year Treasury rose to 1.69% from 1.65%, the 10-year Treasury yield was unchanged from 2.40% and the yield on the 30-year Treasury increased to 2.87% from 2.88%.

“We believe the final shape of tax reform, if it materialized could be markedly different than the current proposals,” Stephen Winterstein, managing director at Wilmington Trust, wrote in a Monday market comment.

“We do suppose however, that municipal yields may decline relative to UST rates because of the specter of a drastic reduction in tax-exempt supply of [private activity bonds] and advanced refundings under the current House and Senate proposals for tax reform. This fear could perpetuate that tendency for the time being,” he wrote.

On Monday, the 10-year muni-to-Treasury ratio was calculated at 80.6% compared with 82.6% on Friday, while the 30-year muni-to-Treasury ratio stood at 93.6% versus 93.1%, according to MMD.

AP-MBIS 10-year muni at 2.292%, 30-year at 2.800%
The Associated Press-MBIS municipal non-callable 5% GO benchmark scale was weaker in late trading.

The 10-year muni benchmark yield gained to 2.292% on Monday from the final read of 2.272% on Friday, according to Municipal Bond Information Services, a national consortium of municipal interdealer brokers. The AP-MBIS 30-year benchmark muni yield increased to 2.800% from 2.794%.

The AP-MBIS benchmark index is a yield curve built on market data aggregated from MBIS member firms and is updated hourly on the Bond Buyer Data Workstation.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 29,840 trades on Friday on volume of $7.80 billion.

Prior week's actively traded issues
Revenue bonds comprised 55.82% of new issuance in the week ended Nov. 10, up from 55.47% in the previous week, according to Markit. General obligation bonds made up 38.78% of total issuance, down from 38.96%, while taxable bonds accounted for 5.40%, down from 5.57%.

Some of the most actively traded bonds by type in the week ended Nov. 10 were from California, Virginia and Texas issuers.

In the GO bond sector, the San Diego Unified School District, Calif., 4s of 2047 were traded 39 times. In the revenue bond sector, the Virginia Small Business Financing Authority 5s of 2056 were traded 97 times. And in the taxable bond sector, the University of Texas 3.376s of 2047 were traded 39 times.

Previous week's top underwriters
The top municipal bond underwriters of last week included JPMorgan Securities, Bank of America Merrill Lynch, Citigroup, Goldman Sachs and Siebert Cisneros Shank, according to Thomson Reuters data.

In the week of Nov. 5 to Nov. 11, JPMorgan underwrote $1.53 billion, BAML $1.44 billion, Citi $1.43 million, Goldman $820.8 million, and SCSCO $721.0 million.

BAML: YTD issuance down 16.9%
Municipal bond issuance for the year to date, as of Nov. 9, was $341 billion, down 16.9% compared to the same period last year, according to Bank of America Merrill Lynch.

Sophie Yan, BAML municipal research strategist, said in a market comment that 51.6% of the issuance so far this year has been related to refundings, compared to 62.7% in the same period in 2016.

However, the month-to-date issuance of $13.8 billion was up 6.2% when compared to the same period last year.

The ICE BAML Muni Master Index returned 5.405% for the year to date, outperforming the Treasury Master Index but underperforming the U.S. Corporate IG Master Index with total returns of 2.485% and 5.725%, respectively.

The best performance in munis so far in 2016 has been in the 22-year and over maturities and in the BBB-rated sector, Yan said.

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