$9.4B Set For Next Week's Holiday-Lite Calendar

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Prices of top-shelf municipal bonds were steady at mid-session, traders said, as yields were flat after rising on Thursday.

Meanwhile, $9.4 billion of bonds are slated to come to market in the upcoming holiday-shortened week.

 

Secondary Market

Prices of top-rated munis were unchanged. The yield on the 10-year benchmark muni general obligation on Thursday was flat from 1.96% on Thursday, while the yield on 30-year GO remained at 2.80%, according to a read of Municipal Market Data's triple-A scale.

Treasury prices were higher on Friday. The yield on the two-year Treasury note dropped to 0.59% from 0.62% on Thursday, while the 10-year yield decreased to 1.97% from 2.00% and the 30-year yield declined to 2.57% from 2.59%.

On Thursday, the 10-year muni to Treasury ratio was calculated at 96.3% versus 100.5% on Wednesday, while the 30-year muni to Treasury ratio stood at 107.0% compared to 110.3%.

 

Primary Market

Traders are now looking ahead to next week's abbreviated trading week. The market will be closed on Good Friday. Volume for next week is estimated at $9.41 billion, consisting of $8.48 billion of negotiated deals and $933.3 million of competitive sales.

Leading off next week's new-issue slate is a $1.26 billion refunding note deal from the Posey County Economic Development Partnership, Ind., for the Midwest Fertilizer Co. The offering is scheduled to be remarketed by Citigroup Global Markets and Guggenheim Securities on Tuesday.

The notes were last remarketed on Nov. 14, 2014 by Citi. The notes, rated A-1-plus by Standard & Poor's, were priced at par to yield 0.23% with a maturity date of July 1, 2046 and a mandatory put date of April 2, 2015.

Citi is also expected to price the Illinois Municipal Electric Agency's $585 million revenue refunding bonds on Tuesday. The bonds are rated A1 by Moody's Investors Service, A by S&P, and A-plus by Fitch Ratings.

Also scheduled is the California Department of Water Resources' $765 million of power supply revenue bonds slated to be priced by J.P. Morgan Securities on Wednesday. The bonds are rated Aa2 by Moody's, AA by S&P, and AA-plus by Fitch.

In the competitive arena, the three largest issues are scheduled for sale on Tuesday.

The state of Utah is slated to sell $224 million of Series 2015 unlimited tax general obligation refunding bonds, expected to be structured with a 2019 maturity and serials ranging from 2022 to 2026. The bonds are rated triple-A by Moody's, S&P and Fitch.

Utah last sold bonds competitively on July 11, 2013, when Morgan Stanley won $226 million of Series 2013 GOs with a true interest cost of 2.8711%.

Bellevue, Wash., will sell $96 million of limited tax GO and refunding bonds, expected to be structured as serials ranging from 2016 to 2034. The issue is rated Aa1 by Moody's and triple-A by S&P.

Bellevue last sold bonds competitively on April 16, 2013, when US Bancorp won $70 million of Series 2013 limited tax GOs with a TIC of 2.6843%.

The Orlando Utilities Commission will offer $95 million of Series 2015A utility system revenue bonds, expected to be structured as serials ranging from 2028 to 2035. The bonds are rated Aa2 by Moody's and AA by S&P and Fitch.

The OU Commission sold bonds in a negotiated transaction on Nov. 20, 2013 when Jeffries priced $243 million of Series 2013 utility system revenue refunding bonds.

 

The Week's Most Actively Quoted Issues

Chicago and Texas names were among the most actively quoted issues in the week ended March 27, according to data released by Markit.

Among bid-side quotes, the California 7 1/2s of 2034 were quoted by 11 unique dealers. Among ask-side quotes, the California Department of Water and Power supply revenue 5s of 2019 were quoted by 12 dealers. And among two-sided quotes, the Texas Transportation Commission Central Texas Turnpike System revenue 5s of 2042 were quoted by 13 dealers, Markit said.

 

The Week's Most Actively Traded Issues

Among the most actively traded issues in the week ended March 27, were issuers from Puerto Rico, California and New York, according to Markit.

In the GO bond sector, Puerto Rico 8s of 2035 were traded 37 times. In the revenue bond sector, California's Golden State Tobacco Securitization Cop. 5s of 2045 were traded 92 times. And in the taxable bond sector, the New York City Transitional Finance Authority 5.508s of 2037 were traded 16 times, according to Markit.

 

Tax-Exempt Bond Funds See Inflows

Municipal bond funds which report weekly posted $581.664 million of inflows in the week ended March 25, after experiencing inflows of $133.676 million in the week ended March 18, according to the latest Lipper data. It was the 11th straight week muni funds experienced inflows.

The four-week moving average remained positive at $319.195 million in the latest week after being in the green at $281.111 million in the prior week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.

Muni bond funds so far have experienced inflows in each week of 2015, according to Lipper data. Inflows for the year total about $5.51 billion.

Long-term muni bond funds saw inflows of $569.870 million in the latest week, after experiencing inflows of $137.153 million in the previous week.

High-yield muni funds recorded an inflow of $306.515 million in the latest reporting week, after seeing inflows of $90.989 million in the previous week. Exchange-traded funds had inflows of $83.348 million, after recording inflows of $73.093 million in the previous week.

In contrast, long-term municipal bond mutual funds posted $190 million of inflows in the week ended March 18, according to the Investment Company Institute. ICI reported that inflows into long-term funds were $276 million in the previous week.

 

Bond Buyer Visible Supply

The Bond Buyer's 30-day visible supply calendar increased $3.613 billion to $11.990 billion on Friday. The total is comprised of $2.394 billion competitive sales and $9.596 billion of negotiated deals.

 

MSRB Previous Session's Activity

The Municipal Securities Rulemaking Board reported 40,463 trades on Thursday on volume of $13.058 billion.

Most active based on the number of trades was the Kentucky Municipal Power Agency's Series 2015A Prairie State project power system revenue refunding 4s of 2039, which traded 210 times at an average price of 99.811 with an average yield of 3.999%; (initial offering price of 97.858, an initial offering yield of 4.14%).

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