Municipal bond traders were looking to see the last of this week's big new issue come to market today led off by the big deal from Virginia's College Building Authority.
Secondary Market
Treasury prices were lower on Thursday. The yield on the two-year Treasury note rose to 0.60% from 0.59% on Wednesday, while the 10-year yield increased to 1.95% from 1.92% and the 30-year yield rose to 2.53% from 2.50%.
The yield on the 10-year benchmark muni general obligation dropped one basis point on Wednesday to 1.93% from 1.94% on Tuesday, while the yield on 30-year GO remained at 2.76%, according to the final read of Municipal Market Data's triple-A scale. Yields remained unchanged during Monday's and Tuesday's trading sessions.
On Wednesday, the 10-year muni to Treasury ratio was calculated at 100.5% versus 103.4% on Tuesday, while the 30-year muni to Treasury ratio stood at 110.3% compared to 112.1%.
Primary Market
On Thursday, J.P. Morgan Securities is expected to price the Virginia CBA's $636 million of bonds for institutions. The bonds are scheduled to mature serially from 2016 to 2035. The issue is rated Aa1 by Moody's Investors Service and AA-plus by Standard & Poor's and Fitch Ratings.
On Wednesday, Citigroup Global Markets received the official award on the California's Golden State Tobacco Securitization Corp.'s $1.692 billion of Series 2015A enhanced tobacco settlement asset-backed bonds for institutions after a one-day retail order period. The bonds are rated A1 by Moody's and A by S&P and Fitch.
The final pricing has the issue yielding from 0.28% with a 2% coupon in 2016 to 1.87% with a 5% coupon in 2022; as 5s to yield 2.43% in 2026; as 4s to yield 3.43% in 2031; as 3 1/4s to yield 3.54% and as 5s to yield 3.12% in a split 2032 maturity; as 5s to yield 3.18% in 2033; as 3 1/4s to yield 3.62% and as 5s to yield 3.22% in a split 2034 maturity; as 4s to yield 3.65% and as 5s to yield 3.25% in a split 2035 maturity; as 5s to yield 3.33% in 2040; and as 5s to yield 3.38% in a 2045 maturity.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $3.749 billion to $8.377 billion on Thursday. The total is comprised of $2.696 billion competitive sales and $5.681 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 38,226 trades on Wednesday on volume of $9.938 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 155 times at an average price of 99.614 with an average yield of 4.013%; (initial offering price of 97.858, an initial offering yield of 4.14%).
Tax-Exempt Money Market Funds Post Outflow
Tax-exempt money market funds had an outflow of $521.6 million, bringing total net assets to $259.47 billion, in the period ended March 23, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $443.7 million to $259.99 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 99th straight week.
The total net assets of the 992 weekly reporting taxable money funds rose $32.79 billion to $2.461 trillion in the period ended March 24, after experiencing an outflow of $19.06 billion to $2.428 trillion in the prior week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 10th consecutive week.
Overall, the combined total net assets of the 1,388 weekly reporting money funds increased $32.27 billion to $2.721 trillion in the period ended March 24, which followed an outflow of $19.50 billion to $2.688 trillion in the prior period.
