It's a Wrap: Munis Finishing Out First Half

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Municipal bond traders are set to see first-half issuance come to an end as the last of the week's bigger deals come to market.

In the last full trading session ahead of Friday's early dismissal and Monday's full market close for the July 4th holiday, traders will be watching muni yields, which while moving up off record depths, still remain at historically low levels.

Secondary Market

U.S. Treasuries were narrowly mixed on Thursday. The yield on the two-year Treasury was unchanged from 0.62% on Wednesday, while the 10-year Treasury yield rose to 1.50% from 1.47% and the yield on the 30-year Treasury bond increased to 2.30% from 2.28%.

Top quality municipal bonds finished steady to weaker on Wednesday. The yield on 10-year benchmark muni general obligation rose one basis point to 1.34% from 1.33% on Tuesday, while the 30-year muni yield was flat from 2.02%, according to the final read of Municipal Market Data's triple-A scale.

The 10-year muni to Treasury ratio was calculated at 90.4% on Wednesday compared to 91.1% on Tuesday, while the 30-year muni to Treasury ratio stood at 88.1% versus 88.8%, according to MMD.

MSRB: Previous Session's Activity

The Municipal Securities Rulemaking Board reported 37,631 trades on Wednesday on volume of $13.20 billion.

Primary Market

Most of the week's larger deals have already come to market.

On Thursday, Ziegler is set to price a $214 million revenue bond deal for Acts Retirement Life Communities. The Series 2016 retirement communities revenue bonds will be sold through separate issuers in Pennsylvania, Georgia and Florida. The deal is rated A-minus by Fitch Ratings.

Bond Buyer Visible Supply

The Bond Buyer's 30-day visible supply calendar decreased $2.23 billion to $7.89 billion on Wednesday. The total is comprised of $2.86 billion of competitive sales and $5.02 billion of negotiated deals.

Tax-Exempt Money Market Funds See Outflows

Tax-exempt money market funds experienced outflows of $7.56 billion, bringing total net assets to $194.91 billion in the week ended June 27, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $2.62 million to $202.47 billion in the previous week.

The average, seven-day simple yield for the 286 weekly reporting tax-exempt funds was unchanged at 0.07%.

The total net assets of the 889 weekly reporting taxable money funds increased $25.59 billion to $2.513 trillion in the week ended June 28, after an outflow of $16.34 billion to $2.487 trillion the week before.

The average, seven-day simple yield for the taxable money funds increased to 0.12% from 0.11% in the prior week.

Overall, the combined total net assets of the 1,175 weekly reporting money funds increased $18.02 billion to $2.708 trillion in the period ended June 28, which followed an outflow of $18.96 billion to $2.690 trillion.

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