Market Awaits Last of Week's New Deals

The municipal bond market is looking to snap up the last of the week's new issues on Thursday as traders carefully eye the direction of muni yields.

Secondary Market

Treasury prices were lower on Thursday, with the yield on the two-year Treasury note rising to 0.70% from 0.66% on Wednesday, while the 10-year yield rose to 2.20% from 2.16% and the 30-year yield increased to 2.95% from 2.93%.

The yield on the 10-year benchmark muni general obligation on Wednesday was two basis points stronger at 2.15% from 2.13% on Tuesday, while the yield on the 30-year GO was up six basis points to 3.11% from 3.05%, 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 99.2% versus 100.0% on Tuesday, while the 30-year muni to Treasury ratio stood at 106.2% compared to 106.9%, according to MMD.

Primary Market

A few deals of note remain on the calendar.

Barclays Capital is set to price the $320 million Connecticut Health and Educational Facilities Authority's Series L revenue bonds for Quinnipiac University. The issue is rated A3 by Moody's Investors Service and A-minus by Standard & Poor's.

Bank of America Merrill Lynch is expected to price the Kentucky Economic Development Finance Authority's $230 million of 30-year tax exempt bonds. Fitch Ratings expects to rate the bonds BBB-plus, while Moody's assigned the deal a provisional rating of Baa2.

Bond proceeds will be loaned to the concessionaire in the Bluegrass State's first availability payment public-private partnership.

The Chicago Park District is expected to come to market with an $88 million bond sale.

Slated to be priced by BMO Capital Markets, Loop Capital Markets and William Blair are co-senior managers. Katten Muchin Rosenman and Charity & Associates are co-bond counsel and Acacia Financial Group and Speer Financial are advising the district, whose board is appointed by Chicago Mayor Rahm Emanuel.

The deal is rated AA-plus by S&P, AA-minus by Fitch and AA by Kroll Bond Rating Agency.

Proceeds include new money for capital projects and refundings for savings and pledge restructuring purposes.

Tax-Exempt Money Market Funds Post Inflows

Tax-exempt money market funds experienced inflows of $350.7 million, bringing total net assets to $247.46 billion in the period ended Aug. 24, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $833.1 million to $247.11 billion in the previous week.

The average, seven-day simple yield for the 383 weekly reporting tax-exempt funds remained at 0.01% for the 121th straight week.

The total net assets of the 967 weekly reporting taxable money funds rose $20.47 billion to $2.467 trillion in the period ended Aug. 25, after experiencing an inflow of $245.7 million to $2.447 trillion in the prior week.

The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 32nd week in a row.

Overall, the combined total net assets of the 1,350 weekly reporting money funds increased $20.82 billion to $2.715 trillion in the period ended Aug. 18, which followed an outflow of $587.4 million to $2.694 trillion the week before.

MSRB Previous Session's Activity

The Municipal Securities Rulemaking Board reported 40,066 trades on Wednesday on volume of $11.770 billion.

Bond Buyer Visible Supply

The Bond Buyer's 30-day visible supply calendar fell $1.35 billion to $6.07 billion on Thursday. The total is comprised of $3.03 billion competitive sales and $3.04 billion of negotiated deals.

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