After one of the busiest trading days in two weeks, the municipal bond market is now turning its gaze toward the upcoming holiday-shortened trading week, which will be highlighted by a Texas issuer.
Primary Market
Citi is expected to price the largest deal of the week on Tuesday, the Texas Transportation Commission's $800 million of state highway fund's first tier revenue refunding bonds. The issue is initially structured as serials running from 2017 through 2026. The bonds are rated triple-A by Moody's Investors Service and Standard & Poor's.
Morgan Stanley is set to price the Metropolitan Washington Airports Authority's $350 million of Series 2015 B, C and D airport system revenue and refunding bonds. The issue is rated A1 by Moody's and AA-minus by S&P and Fitch Ratings.
Morgan Stanley is also expected to price the state of Arizona's $168 million of Series 2015 refunding certificates of participation, acting .The COPs are rated Aa3 by Moody's and AA-minus by S&P.
Jefferies is slated to price the Jets Stadium Finance Issuer 2015, LLC's $147 million of Series 2015 taxable weekly mode variable-rate demand notes on Tuesday. The notes are rated VMIG1 by Moody's and A1 by S&P.
Wells Fargo Securities is set to price Clark County, Nev.'s $102 million of revenue refunding bonds for the Las Vegas-McCarran International Airport on Tuesday. The bonds, initially structured as serials running from 2019 through 2027, are rated A1 by Moody's and A-plus by S&P.
The only competitive bond sale over $100 million will take place on Tuesday, when the North Dakota Public Finance Authority offers $125 million of Series 2015A revolving fund program bonds.
The last time the PFA competitively sold comparable bonds was on April 23, when Citi won $25.62 million of Series 2015B capital financing program bonds with a true interest cost of 3.33%.
Secondary Market
Treasury prices were lower on Friday with the yield on the two-year Treasury note rising to 0.70% from 0.68% on Thursday, while the 10-year yield rose to 2.44% from 2.40% and the 30-year yield increased to 3.20% from 3.16%.
The yield on the 10-year benchmark muni general obligation finished unchanged from 2.32% on Wednesday, while the yield on the 30-year GO was flat at 3.30%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Thursday at 96.4% versus 101.1% on Wednesday, while the 30-year muni to Treasury ratio stood at 104.1% compared to 104.2%, according to MMD.
MSRB Previous Session's Activity
The market had a busy trading day. The Municipal Securities Rulemaking Board reported 40,920 trades on Thursday on volume of $13.745 billion.
The most active bond, based on the number of trades, was the Missouri Southern State University Series 2015 auxiliary enterprise system revenue refunding 4s of 2038, which traded 173 times at an average price of 99.223 with an average yield of 4.05%. The bonds were initially priced at 99.246 to yield 4.05%.
Muni Bond Funds See Outflows for 8th Straight Week
For the eighth week in a row, municipal bond funds reported outflows, bringing to 11 out of 26 weeks this year the funds have suffered cash withdrawals.
The weekly reporting funds saw $105.755 million of outflows in the week ended June 24, after experiencing outflows of $420.844 million in the previous week, according to the latest Lipper data.
The four-week moving average remained negative at $329.772 million after being in the red at $354.647 million in the previous week. The moving average has been negative for three weeks in a row. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.
Long-term muni bond funds also experienced outflows, losing $24.416 million in the latest week, after seeing outflows of $197.404 million in the previous week. It was the also the eighth week in a row long-term funds saw outflows.
Intermediate-term funds recorded outflows of $29.451 million after seeing outflows of $15.216 million in the prior week.
However, high-yield muni funds saw an inflow of $48.394 million in the latest reporting week, after seeing an outflow of $161.877 million the previous week.
And exchange traded funds saw inflows of $41.989 million, after experiencing inflows of $3.186 million in the previous week.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $659.3 million to $6.66 billion on Friday. The total is comprised of $2.22 billion competitive sales and $4.44 billion of negotiated deals.
