Top-shelf municipal bonds were stronger on Friday at midday, as yield on some maturities were as many as two basis points lower, according to traders who were starting to prep for next week's estimated $4.5 billion calendar.
Secondary Market
The 10-year benchmark muni general obligation yield was as many as two basis points lower from 2.42% on Thursday, while the yield on the 30-year GO was as many as two basis points lower from 3.20%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were stronger on Friday around midday. The yield on the two-year Treasury was down to 1.30% from 1.33% on Thursday, while the 10-year Treasury yield dipped to 2.49% from 2.53%, and the yield on the 30-year Treasury bond decreased to 3.10% from 3.14%.
On Thursday, the 10-year muni to Treasury ratio was calculated at 95.8%, compared with 97.9% on Wednesday, while the 30-year muni to Treasury ratio stood at 101.9%, versus 103.5%, according to MMD.
Week's Most Actively Traded Issues
Some of the most actively traded issues by type in the week ended March 17 were from California, Wisconsin and Puerto Rico, according to
In the GO bond sector, the Los Angeles, Calif., 3s of 2042 were traded 42 times. In the revenue bond sector, the Wisconsin Health and Educational Facilities Authority 4s of 2039 were traded 82 times. And in the taxable bond sector, the Employees Retirement System of the Government of the Commonwealth of Puerto Rico 6.15s of 2038 were traded 16 times.
Week's Most Actively Quoted Issues
New York City and Illinois names were among the most actively quoted bonds in the week ended March 17, according to Markit.
On the bid side, the Middletown City School District, N.Y., general obligation 3s of 2040 were quoted by 66 unique dealers. On the ask side, the New York City Municipal Water Finance Authority revenue 4s of 2039 were quoted by 253 unique dealers. And among two-sided quotes, the Illinois taxable 5.1s of 2033 were quoted by 25 unique dealers.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 41,714 trades on Thursday on volume of $10.919 billion.
Lipper: Muni Bond Funds Report Outflows
Investors in municipal bond funds continued to withdraw cash in the latest week, according to Lipper data released late Thursday. The weekly reporters saw $118.061 million of outflows in the week ended March 16, after outflows of $73.145 million in the previous week.
The four-week moving average has now moved into the red at negative $97.024 million, after being positive at $52.510 million in the previous week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.
Long-term muni bond funds also had outflows, losing $126.198 million in the latest week after falling $25.122 million in the previous week. Intermediate-term funds had inflows of $64.843 million after outflows of $1.386 million in the prior week.
National funds had outflows of $12.954 million after inflows of $669.000 million in the previous week. High-yield muni funds reported inflows of $65.995 million in the latest reporting week, after inflows of $17.823 million the previous week.
Exchange traded funds saw inflows of $31.051 million, after inflows of $11.944 million in the previous week.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $1.14 billion to $8.75 billion on Friday. The total is comprised of $3.25 billion of competitive sales and $5.50 billion of negotiated deals.
Primary Market
The week started off abnormally, with a blizzard warning in effect for parts of the northeast Tuesday. The Empire State Development Corporation ended up pushing back five competitive bonds sales totaling $1.84 billion, from Tuesday to Thursday because of the storm.
Although the storm did not drop as much snow as originally thought, the threat still caused a lot of people to be off their desks and had most firms operating half-staffed, but that did not stop the scheduled negotiated deals from coming to market.
RBC Capital Markets priced the Ohio Water Development Authority's $400 million of state water pollution control loan fund revenue bonds.
Bank of America Merrill Lynch priced the county of Hamilton, Ohio's $307.01 million of hospital facilities revenue bonds for Trihealth Inc. Obligated Group Project.
Citigroup priced the California Health Facilities Financing Authority's $292.435 million of revenue bonds for El Camino Hospital.
BAML also priced the city of Chesapeake, Va.'s $101.84 million of GO improvement and refunding bonds.
There were no larger deals that priced on Wednesday, as is typical on days when the FOMC meets.
As expected, the Federal Open Market Committee Wednesday announced it raised the fed funds target by 25 basis points to between 0.75% and 1.00%.
The market priced in the hike after Fed officials called the March meeting "live" or said a rate hike could be appropriate "soon."
The Empire State Development Corp. competitively priced five separate deals that totaled roughly $1.84 billion of New York State Urban Development Corporation State personal income tax revenue general purpose bonds, with three tranches of tax-exempt bonds and two of taxable bonds.
The $514.38 million of series 2017B, Group B taxable bonds were won by JPMorgan with a true interest cost of 2.19%. The $512.89 million of Series 2017B, Group A taxable bonds were won by Morgan Stanley with a TIC of 3.09%. On the tax-exempt side, the $327.245 million of Series 2017A, Group A bonds were won by JPM with a TIC of 2.37%. The $243.2 million of Series 2017A, Group B bonds were won by Jefferies with a TIC of 3.41%. The $242.355 million of Series 2017A, Group C bonds were won by Morgan Stanley with a TIC of 3.95%.
Boulder Valley School District No. RE-2, Colo. sold roughly $285 million of general obligation and GO refunding bonds in two separate deals. The $190 million of GO bonds were won by Morgan Stanley with a TIC of 3.96%. The $94.88 million of GO refunding bonds were also won by Morgan Stanley, with a TIC of 2.44%.
In the negotiated arena on Thursday, JPMorgan priced Monroe County Industrial Development Corp., N.Y.'s $238.19 million of revenue bonds for the University of Rochester Project.
JPMorgan also priced the Washington Health Care Facilities Authority's $114.81 million of revenue bonds for the Seattle Children's Hospital.
