Prices of top-shelf municipal bonds ended weaker on Thursday, traders said, as yields on most maturities rose by one basis point.
In the primary, JPMorgan priced Energy Northwest's electric bonds for institutions after a one-day retail order period and the North Texas Municipal Water District sold bonds competitively.
Secondary Market
Prices of top-quality municipal bonds finished weaker. The yield on the 10-year benchmark muni general obligation rose one basis point to 2.01% from 2.00% on Wednesday, while the yield on the 30-year GO increased one basis point to 2.92% from 2.91%, according to the final read of Municipal Market Data's triple-A scale.
Treasury prices were higher on Thursday as the yield on the two-year Treasury note declined to 0.53% from 0.54% from Wednesday, while the 10-year yield dropped to 1.96% from 1.97% and the 30-year yield decreased to 2.64% from 2.65%.
The 10-year muni to Treasury ratio was calculated on Thursday at 103.3% versus 101.5% on Wednesday, while the 30-year muni to Treasury ratio stood at 110.8% compared to 109.7%.
Primary Market
JPMorgan priced $514.86 million of Energy Northwest's electric revenue and refunding bond deal for institutions after a one-day retail order period.
The $114.23 million of Series 2015-A Project 1 electric revenue refunding bonds were repriced as 5s to yield 1.96% and 2.64% in a split 2027 maturity and as 5s to yield 2.76% and 2.08% in a split 2028 maturity.
The $321.51 million of Series 2015-A Columbia Generating Station electric revenue and refunding bonds were repriced to yield from 1.62% with a 5% coupon in 2021 to 2.20% with a 5% coupon in 2024; from 2.82% with a 5% coupon in 2029 to a split 2035 maturity priced as 4s to yield 3.52%; and as 5s to yield 3.13%. A split 2038 maturity was priced as 4s to yield 3.63% and as 5s to yield 3.21%.
The $79.12 million of Series 2015-A Project 3 electric revenue refunding bonds, were repriced as 3s to yield 0.64% in 2017; as 4s to yield 0.97% in 2018; as 5s to yield 2.35% in 2025 and as 5s to yield 2.52% in 2026.
The bonds are rated Aa1 by Moody's Investors Service, AA-minus by Standard and Poor's and AA by Fitch Ratings.
"The order period has gone well [Thursday] and we have seen oversubscription across many maturities," said Energy Northwest Assistant Treasurer Jeff Windham. He added that "The retail order period went well [on Wednesday] and met our expectations."
In the competitive arena on Thursday, the North Texas Municipal Water District sold $302.13 million of Series 2015 water system revenue refunding and improvement bonds.
Barclays Capital won the deal with a true interest cost of 3.4777%. The bonds were priced to yield from 0.16% with a 3% coupon in 2015 to 3.03% with a 5% coupon in 2036; a 2044 term was priced as 4s to yield 3.60%. The issue is rated Aa2 by Moody's and triple-A by S&P.
The district last sold bonds competitively on June 28, 2012, when Bank of America Merrill Lynch won $358.84 million of Series 2012 water system revenue refunding and improvement bonds with a TIC of 2.9508%.
RBC Capital Markets priced the New Jersey Economic Development Authority's $124.92 million of revenue bonds for the Provident Group-Rowan Properties' Rowan University student housing project. The $121.93 million Series 2015A bonds were priced as 5s to yield from 2.60% in 2021 to 3.39% in 2025; 3.86% in 2030; 4.07% in 2035; and 4.25% in 2048. The $3 million Series 2015B taxable bonds were priced as a 2021 bullet maturity as 4s to yield 4.125%. The issue is rated Baa3 by Moody's and BBB-minus by S&P.
Citi priced the California Health facilities Financing Authority's $160.54 million of Series 2015A revenue bonds for El Camino Hospital. The bonds were priced to yield from 0.24% with a 2% coupon in 2016 to 3.54% with a 5% coupon in 2035; a 2040 term was priced as 5s to yield 3.62% and a 2045 terms was priced as 4s to yield 4.08%. The issue is rated A1 by Moody's and A-plus by S&P.
JPMorgan received the written award on Allen County, Ohio's $159.02 million of Series 2015A hospital facilities revenue refunding improvement bonds for Mercy Health. The bonds were priced as 5s to yield 3.69% in 2043, as 4s to yield 4.20% in 2044 and as 4 1/4s to yield 4.26% in 2045. JPMorgan also got the official award on $100 million of Series 2015B adjustable-rate hospital facilities revenue bonds for Mercy Health. The bonds were priced as a 2035 bullet maturity at par to yield 75 basis points over the SIFMA rate. Both issues are rated A1 by Moody's and AA-minus by S&P and Fitch.
Bank of America Merrill Lynch received the official award on the Washington Health Care Facilities Authority's $103.90 million of Series 2015 revenue bonds for the Central Washington Health Services Association. The bonds were priced to yield from 0.64% with a 3% coupon to 3.80% with a 5% coupon in 2030; a 2036 term bond was priced as 4s to yield 4.23% and a 2039 term was priced as 5s to yield 4.11%. The issue is rated Baa1 by Moody's and BBB-plus by Fitch.
Tax-Exempt Money Market Funds Post Outflow
Tax-exempt money market funds had an outflow of $5.71 billion, bringing total net assets to $250.04 billion in the period ended April 20, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $3.74 billion to $255.76 billion in the previous week.
The average, seven-day simple yield for the 396 weekly reporting tax-exempt funds remained at 0.01% for a 103rd straight week.
The total net assets of the 991 weekly reporting taxable money funds fell $10.44 billion to $2.374 trillion in the period ended April 21, after experiencing an outflow of $26.85 billion to $2.385 trillion in the prior week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 13th consecutive week.
Overall, the combined total net assets of the 1,387 weekly reporting money funds decreased $16.15 billion to $2.624 trillion in the period ended April 21, which followed an outflow of $30.60 billion to $2.641 trillion in the prior period.
