The municipal bond market saw a few large deals come to market on Thursday, topped off by a big Florida issuer.
Prices of top-rated munis were slightly stronger at mid-session, traders said, with some yields down as much as two basis points.
Primary Market
The Florida State Board of Education is scheduled to sell $236.495 million of full faith and credit public education capital outlay refunding bonds, 2015 Series A, in a competitive sale at noon.
The issue is rated Aa1 by Moody's Investors Service and AAA by both Standard & Poor's and Fitch Ratings.
On Wednesday, J.P. Morgan won the city and county of San Francisco, Calif.'s $293.91 million general obligation refunding bonds with a true interest cost of 2.3421%. The bonds were priced to yield from 0.08% with a 2% coupon in 2015 to 2.59% with a 4% coupon in 2030. The bonds are rated Aa1 by Moody's, AA-plus by S&P and AA by Fitch.
Elsewhere, Morgan Stanley received the official award on the $121.345 million Glendale, Ariz., senior lien water and sewer revenue refunding obligations. The bonds were priced to yield from 0.83% with a 4% coupon in 2018 to 2.54% with a 5% coupon in 2028. The issue is rated A1 by Moody's and AA by S&P.
Also, Citigroup Global Markets priced the $386.845 million Kentucky State Property and Building Commission bonds in two series. The $132.095 million of new money revenue bonds, Project No. 108 Series A, were priced with a top yield of 2.97% in 2034 while the $254.75 million of refunding revenue bonds, Project No. 108 Series B, were priced with a top yield of 2.49% in 2026. Both series are rated Aa3 by Moody's and A-plus by S&P and Fitch.
Secondary Market
The yield on the 10-year benchmark general obligation was unchanged from 1.75% on Wednesday, while the yield on 30-year GOs was down as much as two basis points from 2.54%, according to a read of MMD's triple-A benchmark scale.
Treasury prices were mostly lower on Thursday, with the two-year note yield rising to 0.53% from 0.49% on Wednesday. The 10-year yield rose to 1.75% from 1.73%, while the 30-year yield was unchanged at 2.32%.
On Wednesday, the 10-year muni to Treasury ratio increased to 101.7% from 97.8% on Tuesday, while the 30-year muni to Treasury ratio rose to 110.9% from 107.1%
MSRB Reports Previous Session's Activity
The Municipal Securities Rulemaking Board reported 36,331 trades on Wednesday on volume of $12.591 billion.
Most active on Wednesday, based on the number of trades, was the New York City Transitional Finance Authority, 2015 Series S-1 Building Aid revenue bond 3 1/8s of 2032, which traded 55 times with an average price of 101.406 and an average yield of 2.961%.
Outflows Among Muni Money Funds Grows to $1.53 Billion
Tax-exempt money market fund assets dropped to $260.86 billion after $1.53 billion fled the funds in the week ended Jan. 26, according to The Money Fund Report, a service of iMoneyNet.com.
The assets fell from $262.39 billion in the prior week.
The average, seven-day yield for the 396 weekly reporting tax-exempt money funds held steady at 0.01%.
The total net assets of the 994 weekly reporting taxable money funds fell $6.99 billion to $2.457 trillion in the week ended Jan. 27, down from $2.464 trillion in the prior week.
The average seven-day yield for the taxable funds was unchanged at 0.02% for the second consecutive week — after spending 87 weeks at 0.01%.
Overall the combined total net assets of the 1,390 weekly reporting money funds declined by $8.52 billion after losses of $2.718 billion in the week ended Jan. 27.
That was down slightly from last week's total net assets of $2.727 trillion.
Christine Albano contributed to this report.
