Prices of top-shelf municipal bonds were slightly stronger at mid-session in secondary trading, traders said, with yields on some maturities slipping by as much as one basis point.
In the primary market, Wells Fargo Securities priced the New York City Transitional Finance Authority's $785 million bond deal for institutional investors.
Secondary Market
The yield on the 10-year benchmark muni general obligation was off as much as one basis point from 2.04% on Wednesday, while the yield on 30-year GO was down as much as one basis point from 2.86%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were mostly higher on Thursday. The yield on the two-year Treasury note rose to 0.64% from 0.61% on Wednesday while the 10-year yield decreased to 1.98% from 1.99% and the 30-year yield dropped to 2.58% from 2.60%.
On Wednesday, the 10-year muni to Treasury ratio was calculated at 103.5% versus 104.3% on Tuesday, while the 30-year muni to Treasury ratio stood at 111.3% compared to 110.6%.
Primary Market
Wells Fargo priced the TFA's $785 million of tax-exempt fixed-rate refunding bonds for institutions on Thursday. The offering had an order period for retail investors on Tuesday and Wednesday.
The TFA's $737 million future tax secured tax-exempt subordinate bonds, Fiscal 2015 Series C, were priced to yield from 0.72% with a 4% coupon in 2017 to 3.25% with a 3.25% coupon in 2031; a 2016 maturity was offered as a sealed bid.
The TFA's $48 million future tax secured tax-exempt subordinate bonds, Fiscal 2015 Series D, were priced to yield from 0.72% in 2017 with a 4% coupon to 2.68% with a 4% coupon and 2.66% with a 5% coupon in a split 2027 maturity; the 2015 and 2016 maturities were offered as sealed bids.
The bonds are rated Aa1 by Moody's Investors Service and triple-A by Standard & Poor's and Fitch Ratings.
Elsewhere, Morgan Stanley received the official award on the Southern California Public Power Authority's $117 million 2015 subordinate refunding Series C transmission project revenue bonds for the Southern Transmission Project. The bonds were priced as split maturities to yield from 2.08% with a 4% coupon and 2.08% with a 5% coupon in 2024 to a 2.67% with a 4% coupon and 2.52% with a 5% coupon in 2027. The issue is rated AA-minus by S&P and Fitch.
Meanwhile, municipal bond market participants are already looking ahead to the upcoming week, when large offerings from California and Maryland have been slated.
Bank of America Merrill Lynch and Morgan Stanley are scheduled to price California's $1.9 billion of general obligation bonds for retail investors on Tuesday followed by the institutional pricing on Wednesday. The deal is rated Aa3 by Moody's and A-plus by both S&P and Fitch.
On the competitive side, Maryland is scheduled to auction two issues totaling about $922 million on Wednesday. The deals consist of $518 million tax-exempt First Series A State and Local Facilities Loan of 2015 GOs and $404 million First Series B State and Local Facilities Loan of 2015 refunding GOs. The issue is rated triple-A by Moody's, S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $2.326 billion to $10.008 billion on Thursday. The total is comprised of $3.259 billion competitive sales and $6.750 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 38,854 trades on Wednesday on volume of $9.877 billion. Most active on Wednesday, based on the number of trades, was the Winnebago and Boone Counties, Ill., School District No. 205's 2015 Series B 4s of 2035, which traded 89 times at an average price of 101.479, with an average yield of 3.801%.
Tax-Exempt Money Market Funds See Inflows
Tax-exempt money market funds rose $1.98 billion, bringing total net assets to $261.14 billion in the period ended Feb. 23, according to The Money Fund Report, a service of iMoneyNet.com. This follows an outflow of $1.25 billion in the previous week.
The average, seven-day simple yield for the 396 weekly reporting tax-exempt funds remained unchanged at 0.01% for the 95th straight week.
The total net assets of the 991 weekly reporting taxable money funds rose $8.75 billion to $2.441 trillion in the period ended Feb. 24, after seeing an outflow of $21.95 billion in the prior week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the sixth consecutive week.
Overall, the combined total net assets of the 1,387 weekly reporting money funds increased $10.73 billion to $2.702 trillion in the period ended Feb. 17, which followed an outflow of $23.20 billion in the prior period.
