The municipal bond market on Friday was quiet after the flood of new issuance earlier in the week and before the new week's second wave of financings. High-quality municipal bond yields were higher, according to Municipal Market Data.
There are about $11.8 billion of municipal bond sales scheduled for next week, according to Ipreo and The Bond Buyer; this is down from total sales of approximately $12.8 billion this week, according to Thomson Reuters. The weekly average of muni volume in 2014 is $5.5 billion.
The Primary Market
A $1.3 billion general obligation sale from the Los Angeles Community College District will lead the primary market activity. The bonds are rated Aa1 by Moody's Investors Service and AA-plus by Standard & Poor's.
The deal, which is being priced by senior manager Morgan Stanley is comprised of new money and refunding bonds.
California's Bay Area Toll Authority will bring $731 million of revenue debt to market on Tuesday when Bank of America-Merrill Lynch & Co. prices the deal with senior and subordinate debt.
The larger of the series consists of $431 million of San Francisco Bay Area toll revenue senior lien bonds structured as Series D and Series 3 term-rate bonds, and Series G and H index-rate bonds.
That portion of the deal will be offered to retail investors during a retail order period on Monday, following by an institutional pricing on Tuesday, and the bonds are rated Aa3 by Moody's, AA by S&P, and AA-minus by Fitch Ratings.
Meanwhile, the $300 million subordinate toll bridge revenue bonds in Series S6 will be priced on Tuesday by Citigroup Global Markets and is structured as a bullet maturity in 2054 and rated A1 by Moody's and A-plus by S&P.
Elsewhere in the state, a $650 million of tax-exempt and taxable revenue deal from the California Statewide Communities Development Authority is planned for pricing by Bank of America Merrill Lynch.
The deal is rated BBB by Standard & Poor's and BBB-minus by Fitch Ratings and will be priced on Tuesday with a structure that consists of $550 million of 2014 A tax-exempt debt and $100 million of 2014 B taxable bonds - all of which is being sold on behalf of the Loma Linda University Medical Center.
Secondary Market Trading
On Friday, high-grade municipal bond yields were higher. The yield on the benchmark 10-year general obligation rose three basis points to 2.09% from 2.06% at Thursday's close while the yield on 30-year GOs rose two basis points to 3.00% from 2.98%, according to the final read of MMD's triple-A scale.
Treasury yields increased Friday, with the two-year note yield rising to 0.64% from 0.54% on Thursday. The 10-year yield rose to 2.31% from 2.26% while the 30-year increased to 2.97% from 2.96% on Thursday.
The 10-year muni-to-Treasury ratio closed at 90.6% versus 91.6% on Thursday; the 30-year muni to Treasury ratio closed at 101.2%, compared with 101.0% on Thursday.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 45,336 trades on Thursday for volume of $17.588 billion.
Muni Bond Funds See Inflows, Lipper Reports
U.S. municipal bond funds reported cash inflows for the week ended Dec. 3, according to data released on Thursday.
Muni bond funds posted $172.689 million of net inflows in the latest reporting week after recording net inflows of $563.963 million in the previous week, according to Lipper FMI.
The four-week moving average was positive at $493.911 million in the latest week.
Long-term muni bond funds saw inflows of $36.766 million compared to inflows of $266.562 million in the previous week. High-yield muni funds recorded inflows of $117.377 million after inflows of $162.399 million the previous week. Exchange-traded funds had inflows of $9.019 million, after inflows of $40.320 million the previous week. Municipal bond funds are popular with individual investors and they have poured money into the funds in 42 of the 49 weeks of this year.
