Municipal bond traders will see the last issuance of the week come to market on Thursday, on the heels of muni yields dropping in wake of the news that interest rates will increase.
Secondary Market
U.S. Treasuries were weaker on Thursday morning. The yield on the two-year Treasury was up to 1.33% from 1.31% on Wednesday, while the 10-year Treasury yield was rose to 2.53% from 2.50%, and the yield on the 30-year Treasury bond increased to 3.14% from 3.11%.
Top-shelf municipal bonds finished mostly stronger on Wednesday on news the Federal Open Market Committee raised the fed funds target rate by 25 basis points, as anticipated.
The 10-year benchmark muni general obligation yield was four basis point lower to 2.45% from 2.49% on Tuesday, while the yield on the 30-year GO was four basis points lower to 3.21% from 3.25%, according to a final read of Municipal Market Data's triple-A scale.
On Wednesday, the 10-year muni to Treasury ratio was calculated at 97.9%, compared with 96.0% on Tuesday, while the 30-year muni to Treasury ratio stood at 103.5%, versus 102.5%, according to MMD.
Primary Market
The last issuance of the week is set to hit screens on Thursday, with the bulk of it coming via competitive deals.
The Empire State Development Corporation is scheduled to sell a total of roughly $1.84 billion in five separate sales. The New York State Urban Development Corporation State personal income tax revenue general purpose bonds will feature both taxable and tax-exempts. The two larger sales of $523.515 million and $507.32 million will be taxables and the other three sales of $318.975 million, $247.93 million and $246.355 million will be tax-exempts. The deals are rated triple-A by S&P Global Ratings and AA-plus by Fitch Ratings.
Since 2007, the ESDC has sold about $17.69 billion of bonds, with the most issuance coming in 2013 when it offered $3.28 billion. The corporation did not come to market at all in 2012 and has sold more than $1 billion of bonds all but three years in that time. With the competitive sales on Tuesday, the ESDC has now sold more this year than in any of the past three years.
Boulder Valley School District No. RE-2, Colo. is set to sell roughly $285 million in two separate deals. The general obligation and GO refunding bonds are rated Aa1 by Moody's Investors Service and AA-plus by S&P and Fitch.
Tax-Exempt Money Market Fund Inflows
Tax-exempt money market funds experienced inflows of $90.9 million, bringing total net assets to $131.08 billion in the week ended March 13, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $560.5 billion to $130.99 billion in the previous week.
The average, seven-day simple yield for the 232 weekly reporting tax-exempt funds was unchanged from 0.20% in the previous week.
The total net assets of the 860 weekly reporting taxable money funds decreased $4.95 billion to $2.521 trillion in the week ended March 14, after an inflow of $5.37 billion to $2.526 trillion the week before.
The average, seven-day simple yield for the taxable money funds increased to 0.29% from 0.27% in the prior week.
Overall, the combined total net assets of the 1,092 weekly reporting money funds fell $4.86 billion to $2.652 trillion in the week ended March 14, after inflows of $5.93 billion to $2.657 trillion in the prior week.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $318.9 million to $9.89 billion on Thursday. The total is comprised of $5.53 billion of competitive sales and $4.36 billion of negotiated deals.
