Municipal bond traders are excited to get back to work with a good amount of influx hitting the market, after a dead day Wednesday when everyone was awaiting the Fed's rate decision.
Secondary Market
Treasury prices were mixed on Thursday, with the yield on the two-year Treasury flat from 0.71% on Wednesday, while the 10-year yield rose to 2.12% from 2.10% and the 30-year yield increased to 2.89% from 2.87%.
Municipal bond prices finished lower on Wednesday. The yield on the 10-year benchmark muni general obligation rose one basis point to 2.01% from 2.00% on Tuesday, while the yield on the 30-year GO increased one basis point to 3.04% from 3.03%, according to a final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Wednesday at 96.1% versus 98.8% on Tuesday, while the 30-year muni to Treasury ratio stood at 106.0% compared to 106.4%, according to MMD.
Primary Market
Primary issuance will be at the forefront on Thursday, as the rest of the week's major issuance will hit the market. Participants are eager to get back into the action, after Wednesday saw no issuance ahead of the Fed, although the decision to hold rates came to no one's surprise.
In the competitive arena on Thursday, the California State Public Works Board will offer $223 million of Series 2015H Department of Corrections and Rehabilitation lease revenue bonds for the Corcoran State Prison.
The issue is rated A1 by Moody's, A-plus by S&P and A by Fitch. The bonds are tentatively structured to mature serially from 2016 to 2035.
Since 2005, the California State Public Works Board has issued about $14.12 billion of debt, with the most issuance occurring in 2009 and 2012 when it sold $2.19 billion and $2.10 billion, respectively. PWB issuance was at its lowest in 2006 and 2008 when it issued $614 million and $365 million, respectively.
In the negotiated sector on Thursday, Raymond James is slated to price the Broward County Airport Authority, Fla.'s $489 million of airport revenue bonds for the Fort Lauderdale International Airport.
The issue will consist of Series A and C bonds subject to the alternative minimum tax and Series B non-AMT bonds. The deal is tentatively structured as serials maturing from 2016 to 2035 with term bonds in 2040 and 2045.
The bonds are rated A1 by Moody's Investors Service and A-plus by Standard & Poor's.
Bank of America Merrill Lynch is expected to price the Washington Township HealthCare District, Calif.'s $146 million of Series 2015B 2012 Election GOs on Thursday.
BAML is also expected to price the California Pollution Control Financing Authority's $126 million of solid waste disposal refunding revenue bonds for Waste Management Inc. on Thursday. The issue is rated A-minus by S&P.
Siebert Brandford Shank is set to price Harris County, Texas' $145 million of Series 2015B toll road senior lien revenue refunding bonds on Thursday.
And Wells Fargo Securities is set to price the Virginia Housing Development Authority's $101 million of taxable mortgage pass-through bonds on Thursday. The deal is rated triple-A by Moody's and S&P.
Also on Thursday, Citigroup and Guggenheim Securities will remarket Posey County, Ind.'s $1.2 billion of Series 2013A revenue refunding bonds for the Midwest Fertilizer Co. The deal has been remarketed several times, the last being on March 27. It has a put date of Aug. 2, 2016. The issue is rated A1-plus by S&P.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 38,014 trades on Wednesday on volume of $10.59 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $845 million to $8.43 billion on Thursday. The total is comprised of $2.70 billion competitive sales and $5.73 billion of negotiated deals.
