Municipals steady ahead of anemic $1.1 billion supply; 10-year yield at 2.12%, 30-year at 3.13%

By Sheri Kasprzak

New York, Nov. 23 – Municipals ended the Monday session unchanged, market sources said.

The 10-year triple-A muni yield held steady at 2.12%, and the 30-year yield remained at 3.13%, said traders in the afternoon.

New offerings will be few and far between ahead of Thanksgiving, with about $1.1 billion of supply expected. This is a far cry from the $10.8 billion seen last week.

“Last week, the market digest an abnormally high issuance of almost $10.8 billion, as issuers continued to take advantage of the lower yield environment ahead of any December Fed action,” said Alan Schankel, managing director with Janney Montgomery Scott LLC.

“Further investor attention in the marketplace before the shortened and notoriously quiet Thanksgiving week also drove demand. To illustrate how quiet Thanksgiving week will be, the proposed calendar for this week is approximately $1.1 billion, compared to the average weekly calendar of $6 billion over the past month.”

Minnesota Housing leads deals

Heading up that meager calendar is an offering from the Minnesota Housing Finance Agency, which is on tap to bring $135.62 million of residential housing finance bonds (Aa1/AA+/) Tuesday.

The deal includes $95,995,000 of series 2015E AMT bonds and $39,625,000 of series 2015F bonds.

The bonds will be offered through RBC Capital Markets LLC.

Proceeds will refund outstanding bonds in the Residential Housing Finance Bonds Resolution and purchase mortgage-backed securities backed by mortgage loans for low and moderate income residents of Minnesota.

Mississippi offering set

Also coming up on Tuesday, the Mississippi Development Bank is set to price $86.72 million of power supply special obligation refunding bonds (Baa1/BBB/).

The bonds are due 2016 to 2035 with a term bond due in 2041.

Wells Fargo Securities LLC and Piper Jaffray & Co. are the senior managers.

Proceeds will finance a loan to the Municipal Energy Agency of Mississippi, the proceeds of which will be used to refund the bank’s series 2006 special obligation bonds.

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