While there are no major municipal bond sales slated for this week, next week is an altogether different matter as billions of dollars of bonds and notes are slated to hit the market.
And the supply surge will resume as the market gets back to work in the first full trading week of the new year.
“We expect that the strong fourth quarter primary pace will continue in the new year, with $8 billion already listed for sale in the week of Jan. 6,” according to Janney.
Leading the competitive calendar for the week of Jan. 6, 2020 is the New York Metropolitan Transportation Authority, which is coming to market with $2.4 billion of deals composed of $939.6 million of green revenue bonds and $1.5 billion of bond anticipation notes.
Besides the N.Y. MTA offerings, “Chicago will also be a first week factor, with a $346 million general obligation refunding issue (NR/BBB+/BBB-) as well as $912 million Sales Tax Securitization Corp. (STSC) second lien bonds (NR/AA-/AAA), with taxable and tax free components,” Janney said. “Chicago has been using the higher rated STSC, which is backed by the city’s share of state sales tax revenue, to refinance GO debt.”
Activity was quiet during the last full trading day of 2019. Financial markets will close early on Tuesday ahead of the New Year’s holiday.
Munis were mixed on the MBIS benchmark scale, with yields rising two basis points in the 10-year maturity and falling less than a basis point in the 30-year maturity. High-grades were also mixed, with yields on MBIS AAA scale rising by two basis points in the 10-year maturity and remaining unchanged in the 30-year maturity.
On Refinitiv Municipal Market Data’s AAA benchmark scale, the yield on the 10-year GO remained steady at 1.44% while the 30-year rose one basis point to 2.09%.
“Munis are drifting lower, in line with other fixed income sectors, in quiet holiday trading,” ICE Data Services said in a Monday market comment.
The 10-year muni-to-Treasury ratio was calculated at 78.1% while the 30-year muni-to-Treasury ratio stood at 92.5%, according to MMD.
Stocks were lower as Treasuries weakened.
The Dow Jones Industrial Average was down about 0.58%, the S&P 500 Index lost around 0.51% and the Nasdaq was off about 0.62%.
The Treasury three-month was yielding 1.546%, the two-year was yielding 1.577%, the five-year was yielding 1.683%, the 10-year was yielding 1.901% and the 30-year was yielding 2.352%.
Previous session’s activity
The MSRB reported 18,183 trades Friday on volume of $7.05 billion. The 30-day average trade summary showed on a par amount basis of $11.54 million that customers bought $6.19 million, customers sold $3.38 million and interdealer trades totaled $1.96 million.
California, New York and Texas were most traded, with the Golden State taking 17.401% of the market, the Empire State taking 13.061% and the Lone Star State taking 10.707%.
The most actively traded security was the Santa Cruz, Calif., green bond 5s of 2049, which traded four times on volume of $11.32 million.
Previous week’s actively traded issues
According to IHS Markit, revenue bonds made up 54.26% of total new issuance in the week ended Dec. 27, down from 54.35% in the prior week. General obligation bonds were 41.16%, up from 40.94%, while taxable bonds accounted for 4.58%, down from 4.71%.
Some of the most actively traded munis by type in the week were from New York issuers.
In the GO bond sector, the New York City zeros of 2038 traded 18 times. In the revenue bond sector, the New York State Dormitory Authority 4s of 2047 traded 66 times. In the taxable bond sector, the DASNY 3.19s of 2043 traded 68 times.
Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation.