Municipal bond traders are focused on the New York City Transitional Financing deals' institutional pricing Wednesday, even as they look ahead to Friday's employment situation report. Otherwise there are some large higher education and health deals which may provide some yield. Here's the playbook for Wednesday:
- The institutional order period starts today for the largest deal of the week, the $700 million New York City Transitional Finance Authority future tax secured subordinate bond sale being priced by Barclays. Reports about the deal's retail order period the past two days have been mixed, but most traders believe the 5% coupon will attracted institutional investors. The TFA is also auctioning $150 million at 10:45 a.m. New York time. The bonds are rated triple-A by all three major rating agencies.
- The North Texas Tollway Authority is expected to come to market with a $500 million issue consisting of first tier bonds rated A2 by Moody's Investors Service and A by Standard & Poor's, and second tier bonds that received an A3 from Moody's and a BBB-plus from S&P.
- The Anaheim Public Finance Authority is issuing $256 million of lease revenue Anaheim Convention Center Expansion Project bonds in tax-exempt and taxable parts. Citigroup is the managing underwriter and the bonds are rated AA-minus by S&P and Fitch Ratings.
- For investors wanting some transportation paper, the Pennsylvania Turnpike Commission is issuing turnpike revenue funding bonds scheduled for pricing by RBC Capital Markets. The deal totals $237.1 million and is rated A1 by Moody's, and A-plus by S&P and Fitch.
- The Wisconsin Health and Higher Education Facilities Authority is scheduled to sell a $180 million deal rated AA-minus by S&P and Fitch that has Bank of America Merrill Lynch as its lead underwriter.
- Denver, Colorado's School District No. 1 is expected to issue general obligation bonds totaling $149.2 million, rated Aa2 by Moody's and AA-minus by S&P and AA-plus by Fitch. Stifel, Nicolaus & Co. is the lead manager.
- Finally on the negotiated calendar the Maryland Health & Higher Educational Facilities Authority plans $122 million of bonds for the Anne Arundel Health System Issue. Citigroup will price the deal, which is rated A3 by Moody's and A-minus by S&P and Fitch.
- The largest deal scheduled for auction on Wednesday is the $400 million District of Columbia note deal rated SP1-plus by S&P and F1-plus by Fitch.
- It's followed by the $295.3 million North Carolina refunding bond deal expected at 10:30 a.m. EST. The bonds are rated AA1 by Moody's, AA by S&P and AA-plus by Fitch.
- Other than that for deals over $200 million there are some Arkansas revenue bonds that are rated Aa1 By Moody's and AA by Fitch.
- Finally in the competitive market Frisco, Texas, is selling independent school district education bonds rated triple-A by Moody's and S&P.
Economic
Traders are brushing off the economic news coming on Wednesday and focusing on the employment situation report expected at the end of the week. They said the report is particularly important because the market began selling off after the ISM manufacturing index showed a strong number, and if the unemployment number falls significantly or nonfarm payrolls rise, the muni market's weakening is likely to be exacerbated.
Yields
Treasuries sold off on Wednesday morning with the 30-year's yield increasing the most by two basis points to 3.07%. The 10-year and 2-year note's yields grew by one basis point each to 2.36% and 0.53% respectively.
