As municipal market participants are awaiting the next step in the tax bill process, they are also preparing for one of the busiest and biggest weeks the market has ever seen.
The MBIS municipal non-callable 5% GO benchmark scale was stronger in early trading.
The 10-year muni benchmark yield fell to 2.351% on Monday from the final read of 2.356% on Friday, according to Municipal Bond Information Services. The MBIS 30-year benchmark muni yield decreased to 2.814% from 2.852%.
The MBIS benchmark index is updated hourly on the Bond Buyer Data Workstation.
U.S. Treasuries were weaker on Monday morning. The yield on the two-year Treasury rose to 1.81% from 1.77%, the 10-year Treasury yield gained to 2.39% from 2.36% and the yield on the 30-year Treasury increased to 2.79% from 2.76%.
Top-rated municipals were stronger Friday. The yield on the 10-year benchmark muni general obligation was eight basis points lower to 2.07% from 2.15% on Thursday, while the 30-year GO yield was down 11 basis points to 2.68% from 2.79%, according to a final read of MMD’s triple-A scale.
On Friday, the 10-year muni-to-Treasury ratio was calculated at 87.6% compared with 89.1% on Wednesday, while the 30-year muni-to-Treasury ratio stood at 97.1% versus 98.6%, according to MMD.
Prior week's actively traded issues
Revenue bonds comprised 55.98% of new issuance in the week ended Dec. 1, up from 55.43% in the previous week, according to Markit. General obligation bonds made up 38.83% of total issuance, down from 39.27%, while taxable bonds accounted for 5.19%, down from 5.30% a week earlier.
Some of the most actively traded bonds by type were from Puerto Rico, New York and California.
In the GO bond sector, the Commonwealth of Puerto Rico 8s of 2035 were traded 34 times. In the revenue bond sector, The New York Metropolitan Transportation Authority 3.25s of 2036 were traded 80 times. And in the taxable bond sector, the State of California 2.25s of 2019 were traded 18 times.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 40,630 trades on Friday on volume of $16.14 billion.
Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar increased 1.131 billion to $22.78 billion on Monday. The total is comprised of $5.14 billion of competitive sales and $17.64 billion of negotiated deals.
Ipreo estimates volume will catapult to $17.39 billion from the revised total of $9.32 billion sold in the past week, according to updated figures from Thomson Reuters. The calendar for the week ahead is composed of $15.51 billion of negotiated deals and $1.88 billion in competitive sales.
The action will get started for institutions on Tuesday, but retail will be able to get their hands dirty starting on Monday.
Bank of America Merrill Lynch is slated to price Trinity Health Credit Group’s $900 million of tax-exempt bonds on Tuesday after a one-day retail order period on Monday. Roughly $775 million will be offered through the Michigan Finance Authority, $43 million will be issued through the Idaho Health Facilities Authority, and $75 million will be issued via Franklin County, Ohio. The deal is rated Aa3 by Moody’s Investors Service and AA-minus by Fitch Ratings.
The group conceded that it accelerated the offering to beat the tax reform clock.
Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation. Click here for a brief tour of the Workstation, or contact Vanessa Kim at 212-803-8474 for more information.