$7.2B of New Issues Slated to Hit Muni Market

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Top-shelf municipal bonds ended stronger on Friday as the market was primed for a manageable new issue calendar for the upcoming week.

Ipreo estimates total volume at $7.20 billion, up from $6.33 billion in the past week, according to revised data from Thomson Reuters. The calendar compares with the 2016 weekly average of about $7.7 billion.

The supply slate is made up of $5.88 billion of negotiated deals and $1.32 billion of competitive sales.

"There is a lot of demand going into the week," said Alan Schankel, managing director at Janney. "There are some high-quality names coming and municipal bond fund flows still show demand."

The biggest deal is coming from the Aloha State on Thursday.

Citigroup is set to price Hawaii's $676 million of general obligation, GO refunding and taxable GO bonds, hard on the heels of credit ratings upgrades from Moody's Investors Service and S&P Global Markets.

The deal is rated Aa1 by Moody's and AA-plus by S&P; Fitch Ratings affirmed the state at AA.

"After two upgrades, the Hawaii deal will be well-received," Schankel said.

Also on tap, Wells Fargo Securities is slated to price the California State Public Works Board's $527.54 million of Series 2016C&D refunding bonds for various capital projects on Tuesday. The deal is rated A1 by Moody's and A-plus by S&P and Fitch.

Morgan Stanley is set to price Massachusetts' $430 million of transportation fund revenue bonds on Thursday. The deal is rated Aa1 by Moody's and AAA by S&P.

Goldman Sachs is expected on Wednesday to price the Anaheim Housing and Public Improvements Authority, Calif.'s $290.44 million of Series 2016A tax-exempt and Series 2016B taxable electric utility distribution system revenue bonds for Anaheim Public utilities. The deal is rated AA-minus by S&P and Fitch.

In the competitive arena, Mecklenburg County, N.C. is selling $200 million of Series 2016B unlimited tax GO improvement bonds on Thursday. The deal is rated triple-A by Moody's, S&P and Fitch.

The county last competitively sold comparable bonds on Feb. 24, 2015 when Wells Fargo won $100 million of Series 2015A GO school bonds with a true interest cost of 2.62%.

Secondary Market

The yield on the 10-year benchmark muni general obligation fell three basis points to 1.52% from 1.55% on Thursday, while the yield on the 30-year slipped one basis point to 2.30% from 2.31%, according to the final read of Municipal Market Data's triple-A scale.

Treasuries were stronger on Friday. The yield on the two-year Treasury declined to 0.75% from 0.77% on Thursday, the 10-year Treasury yield dropped to 1.62% from 1.63% and the yield on the 30-year Treasury bond decreased to 2.34% from 2.36%.

MSRB: Previous Session's Activity

The Municipal Securities Rulemaking Board reported 35,494 trades on Thursday on volume of $12.83 billion.

Week's Most Actively Traded Issues

Some of the most actively traded issues by type in the week ended Sept. 22 were from California and New York issuers, according to Markit.

In the GO bond sector, the Centinela Valley Union High School District, Calif., 3s of 2044 were traded 33 times. In the revenue bond sector, the New York City Transitional Finance Authority 4s of 2041 were traded 48 times. And in the taxable bond sector, the University of California Medical Center pooled revenue 6.548s of 2048 were traded 12 times.

Week's Most Actively Quoted Issues

Puerto Rico, New York and Illinois issues were among the most actively quoted bonds in the week ended Sept. 22, according to Markit.

On the bid side, the Puerto Rico Commonwealth GO 5s of 2041 were quoted by 47 unique dealers. On the ask side, the NYC TFA revenue 3s of 2042 were quoted by 256 unique dealers. And among two-sided quotes, the Illinois taxable 5.1s of 2033 were quoted by 26 unique dealers.

Lipper Reports More Inflows

For the 51st straight week, municipal bond funds reported inflows, according to Lipper data released on Thursday. The weekly reporters saw $517.593 million of inflows in the week ended Sept. 14, after inflows of $485.522 million in the previous week, Lipper said.

The four-week moving average remained positive at $604.298 million after being in the green at $675.129 million in the previous week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.

Long-term muni bond funds experienced inflows, gaining $327.449 million in the latest week after inflows of $419.949 million in the previous week. Intermediate-term funds had inflows of $89.747 million after inflows of $176.075 million in the prior week.

National funds had inflows of $429.444 million on top of inflows of $360.119 million in the previous week. High-yield muni funds reported inflows of $69.736 million in the latest reporting week, after inflows of $175.483 million the previous week.

Exchange traded funds saw inflows of $111.876 million, after outflows of $14.231 million in the previous week.

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