Municipal market participants are awaiting Tuesday's Congressional testimony from Federal Reserve Chair Janet Yellen.
Yellen is set to begin the first day of a two-day appearance before Congress to deliver the Fed's semi-annual economic report. She will speak to a Senate panel Tuesday and House committee Wednesday.
The market will be listening for any hint on the timing or pace of an interest rate tightening. However, most analysts expect Yellen won't give anything away and will defend the Fed's current monetary policy stance amid an unclear economic picture after mixed economic data releases.
Secondary Market
Treasury prices were mixed on Tuesday. The yield on the two-year Treasury note was unchanged from Monday at 0.61% while the 10-year yield rose to 2.08% from 2.06% and the 30-year yield increased to 2.68% from 2.66%.
On Monday, prices of top-shelf municipal bonds closed unchanged for the third session in a row. The yield on the 10-year benchmark muni general obligation was flat at 2.08%, while the yield on 30-year GO remained at 2.88%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 101.0% on Monday versus 97.7% on Friday, while the 30-year muni to Treasury ratio stood at 108.3% compared to 105.4%.
Primary Market
Today, Loop Capital Markets is scheduled to price the biggest deal of the week -- Atlanta, Ga.'s $1.25 billion of water and wastewater revenue refunding bonds.
"The city recently completed an investor roadshow for the transaction and we were pleased with the level of interest in this offering," said James Beard, Atlanta's finance director.
Last month, Standard & Poor's raised the rating on the city's $3 billion of outstanding water and sewer revenue bonds to AA-minus from A-plus. S&P also assigned the AA-minus rating to the refunding, with a stable outlook. S&P cited the city's strong financial performance, high liquidity, and a large pay-as-you-go capital program.
Fitch Ratings has assigned an A-plus rating to the issue and revised the outlook to positive from stable, citing improving financial metrics, cost controls, and relatively stable sales at the Department of Watershed Management, which oversees the wastewater program.
Moody's Investors Service assigned an Aa3 rating with a stable outlook to the deal.
Proceeds will be used to refund about $231 million of 2001A bonds, $479 million of 2004 bonds, and $596 million of 2009A bonds.
Beard said savings from the transaction will be invested in completing projects necessary for the operation and maintenance of the system.
Two separate offerings from the Clark County School District, Nev., totaling $398.405 million are scheduled for competitive sale Tuesday.
The school district will sell $266.640 million Series A limited tax general obligation refunding bonds and $131.765 million Series B limited tax GO refunding bonds. Both issues are rated A1 by Moody's and AA-minus by S&P.
The Clark County School District last sold bonds competitively on April 8, 2014. Morgan Stanley won the $62.2 million Series 2014B limited tax GOs with a true interest cost of 1.3395%
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $219.6 million to $13.297 billion on Tuesday. The total is comprised of $3.758 billion competitive sales and $9.539 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 36,901 trades on Monday on volume of $5.745 billion.
Most active on Monday, based on the number of trades, was the Winnebago and Voone Counties, Ill., School District No. 205's 2015 Series B 4s of 2035, which traded 180 times at an average price of 100.816, with an average yield of 3.887%.
