Muni Market Set for Tobacco Deal, Mass. DFA Pricing

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Municipal bond traders will be seeing the last of the week's big new issues hit the market on Thursday, topped by a large tobacco sale from California and a higher education deal out of Massachusetts.

Secondary Market

U.S. Treasuries were mixed on Thursday. The yield on the two-year dipped to 1.27% from 1.28% on Wednesday, while the 10-year Treasury yield was unchanged from 2.39%, and the yield on the 30-year Treasury bond increased to 3.00% from 2.99%.

Top-shelf municipal bonds finished unchanged on Wednesday. The yield on the 10-year benchmark muni general obligation was unchanged from 2.23% on Tuesday, while the 30-year GO yield was steady from 3.01%, according to the final read of Municipal Market Data's triple-A scale.

On Wednesday, the 10-year muni to Treasury ratio was calculated at 93.5% compared with 92.5% on Tuesday, while the 30-year muni to Treasury ratio stood at 100.6%, versus 99.8%, according to MMD.

MSRB: Previous Session's Activity

The Municipal Securities Rulemaking Board reported 46,051 trades on Wednesday on volume of $15.97 billion.

Primary Market

Jefferies is expected to price the Golden State Tobacco Securitization Corp.'s $618.81 million of Series 2017A-1 tobacco settlement asset-backed bonds on Thursday.

Morgan Stanley is set to price the Massachusetts Development Finance Agency's $272.8 million of revenue refunding bonds for Suffolk University.

Since 2007, the Massachusetts DFA has sold about $16.6 billion of bonds, with the most issuance occurring in 2016 when it offered $4.13 billion of debt. The agency saw a low year of issuance back in 2009, when it sold $617 million – one of only two times in that period it has not sold more than $1 billion in a calendar year.

Bond Buyer Visible Supply

The Bond Buyer's 30-day visible supply calendar decreased $1.12 billion to $9.19 billion on Thursday. The total is comprised of $2.92 billion of competitive sales and $6.27 billion of negotiated deals.

Tax-Exempt Money Market Fund Outflows

Tax-exempt money market funds experienced outflows of $949.2 million, bringing total net assets to $130.15 billion in the week ended March 27, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $18.1 billion to $131.10 billion in the previous week.

The average, seven-day simple yield for the 232 weekly reporting tax-exempt funds leapt to 0.32% from 0.25% in the previous week.

The total net assets of the 861 weekly reporting taxable money funds increased $6.42 billion to $2.502 trillion in the week ended March 28, after an outflow of $25.78 billion to $2.495 trillion the week before.

The average, seven-day simple yield for the taxable money funds rose to 0.38% from 0.36% in the prior week.

Overall, the combined total net assets of the 1,091 weekly reporting money funds increased $5.47 billion to $2.632 trillion in the week ended March 28, after outflows of $25.75 billion to $2.626 trillion in the prior week.

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