The municipal bond market on Thursday is looking to see the last of the week's big deals come to market.
In the primary, JPMorgan is expected to price Energy Northwest's electric bonds for institutions after a one-day retail order period.
Secondary Market
Treasury prices were unchanged on Thursday as the yield on the two-year Treasury note was steady at 0.54% from Wednesday, while the 10-year yield was flat at 1.97% and the 30-year yield remained at 2.65%.
Prices of top-shelf municipal bonds fell on Wednesday. The yield on the 10-year benchmark muni general obligation rose four basis points to 2.00% from 1.96% on Tuesday, while the yield on the 30-year GO increased five basis points to 2.91% from 2.86%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Wednesday at 101.5% versus 100.3% on Tuesday, while the 30-year muni to Treasury ratio stood at 109.7% compared to 109.6%.
Primary Market
On Wednesday, JP Morgan priced for retail $514.86 million of Energy Northwest's electric revenue and refunding bond deal.
The $114.23 million of Series 2015-A Project 1 electric revenue refunding bonds were priced as 5s to yield 1.86% in a 2027 split maturity; no retail orders were taken for the other half of the 2027 maturity or for a 2028 maturity.
The $321.51 million of Series 2015-A Columbia Generating Station electric revenue and refunding bonds were priced to yield from 1.59% with a 5% coupon in 2021 to 2.13% with a 5% coupon in 2024; the bonds were also priced as 5s to yield 2.24% in a 2032 split maturity and as 5s to yield 3.07% in a 2035 split maturity. The other halves of the 2032 and 2035 maturities, as well as the 2029-2031, 2033-2034 and a term bond in 2038 were not offered to retail.
The $79.12 million of Series 2015-A Project 3 electric revenue refunding bonds, were priced as 3s to yield 0.64% in 2017 and as 4s to yield 0.96% in 2018. A 2025 split maturity was priced as 4s and 5s to yield 2.26%. No retail orders were taken for the 2026 maturity.
The bonds are rated Aa1 by Moody's Investors Service, AA-minus by Standard and Poor's and AA by Fitch Ratings.
"The bond ratings reflect the credit quality of the full Federal Columbia River Power and Transmission System as the bonds are supported by revenues generated by Columbia Generating Station, 31 federal dams, and 15,000 miles of high-voltage transmission lines," said Jeff Windham, Energy Northwest's assistant treasurer.
Since 2001, Energy Northwest has issued over $10 billion of debt, with the highest years of issuance occurring in 2003 and 2011 when they sold $1.245 billion and $1.103 billion of bonds, respectively. They did not issue any debt in 2013 and sold only $370.6 million of bonds in 2010.
In the competitive arena on Thursday, the North Texas Municipal Water District is selling $302.13 million of Series 2015 water system revenue refunding and improvement bonds. The issue is rated Aa2 by Moody's and triple-A by S&P.
The district last sold bond competitively on June 28, 2012, when Bank of America Merrill Lynch won $358.84 million of Series 2012 water system revenue refunding and improvement bonds with a true interest cost of 2.9508%.
Tax-Exempt Money Market Funds Post Outflow
Tax-exempt money market funds had an outflow of $5.71 billion, bringing total net assets to $250.04 billion in the period ended April 20, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $3.74 billion to $255.76 billion in the previous week.
The average, seven-day simple yield for the 396 weekly reporting tax-exempt funds remained at 0.01% for a 103rd straight week.
The total net assets of the 991 weekly reporting taxable money funds fell $10.44 billion to $2.374 trillion in the period ended April 21, after experiencing an outflow of $26.85 billion to $2.385 trillion in the prior week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 13th consecutive week.
Overall, the combined total net assets of the 1,387 weekly reporting money funds decreased $16.15 billion to $2.624 trillion in the period ended April 21, which followed an outflow of $30.60 billion to $2.641 trillion in the prior period.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $1.183 billion to $8.299 billion on Thursday. The total is comprised of $3.575 billion competitive sales and $4.725 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 41,377 trades on Wednesday on volume of $13.698 billion.
The most active bond, based on the number of trades, was the California 2015 various purpose refunding 3 1/2s of 2035, which traded 246 times at an average price of 99.634 with an average yield of 3.518%. The bonds were initially priced at par to yield 3.50%.
