The Los Angeles Department of Water and Power sold almost $508 million of power system revenue bonds, as the last deals of a busy week came to market. Prices of top-rated municipal bonds finished weaker, traders said, with yields on some maturities rising by a basis point.
Primary Market
Bank of America Merrill Lynch priced the $507.74 million L.A. DEWAPs to yield from 2.72% with a 5% coupon in 2028 to 3.10% with a 5% coupon in 2036; a 2040 term bond was priced as 4s to yield 2.82%. The issue is rated Aa3 by Moody's Investors Service and AA-minus by Standard & Poor's and Fitch Ratings.
Citigroup Global Markets priced tax-exempt and taxable deals totaling $182.61 million for the New Jersey Housing and Mortgage Finance Agency. Both issues were rated AA-minus by S&P.
The HFMA's $143.66 million taxable multi-family revenue bonds were priced in two series. The $138.95 million Series E bonds were priced at par to yield from 0.813% in 2015 to 3.772% in 2025; a 2030 term was priced at par to yield 4.272%; a 2037 term was priced at par to yield 4.471%; and a 2045 term was priced at par to yield 4.671%. The $4.71 million Series F bonds were priced at par to yield 1.113% in 2016.
The HMFA's $38.96 million multi-family revenue bonds were priced in two series. The $10.99 million non-AMT Series A bonds were priced at par to yield from 0.55% in 2016 to 3.625% in 2030; a 2035 term was priced at par to yield 3.85% and a 2045 term was priced at par to yield 4.00%. The $27.97 million Series B bonds were priced at par to yield 0.55% in 2016 and at par to yield 0.85% and at par to yield 1.00% in a split 2017 maturity.
Raymond James & Associates priced the Prosper Independent School District, Texas' $158.57 million of unlimited tax refunding bonds. The issue was priced to yield from 0.24% with a 2% coupon in 2016 to 3.45% with a 4% coupon in 2035; a 2040 term bond was priced as 5s to yield 3.18% and a 2043 term was priced as 4s to yield 3.61%. The bonds are backed by the Permanent School Fund guarantee program and rated triple-A by Moody's and S&P.
FirstSouthwest priced the Birdville Independent School District, Tarrant County, Texas' $189.92 million offering in three series. The $91.51 million Series 2015A unlimited tax school building bonds were priced to yield from 0.63% with a 4% coupon in 2017 to 3.04% with a 5% coupon in 2035; a 2040 term was priced as 5s to yield 3.15%. The 2016 maturity was offered as a sealed bid. The $94.66 million Series 2015B unlimited tax refunding bonds were priced to yield from 1.47% with a 5% coupon in 2020 to 2.92% with a 5% coupon in 2032. The $3.76 million premium capital appreciation bonds were priced to yield 1.21% in 2018, 1.48% in 2019 and 1.72% in 2020. The issue is backed by the Permanent School Fund guarantee program and rated triple-A by Fitch and expected to be rated triple-A by S&P.
Goldman, Sachs priced the Port of Portland, Ore.'s $109.94 million revenue refunding bonds for the Portland International Airport. The issue was priced to yield from 1.03% with a 5% coupon in 2018 to 3.23% with a 5% coupon in 2035; a 2038 term was priced as 5s to yield 3.30%. The bonds are rated AA-minus by S&P.
Secondary Market
The yield on the 10-year benchmark muni general obligation on Thursday rose one basis point to 2.09% from 2.08% on Wednesday, while the yield on 30-year GO was up one basis point to 2.93% from 2.92%, according to the final read of Municipal Market Data's triple-A scale.
Treasury prices were mixed on Thursday. The yield on the two-year Treasury note fell to 0.64% from 0.66% on Wednesday, while the 10-year yield was unchanged at 2.11% and the 30-year yield slipped to 2.72% from 2.73%.
The 10-year muni to Treasury ratio on Thursday was calculated at 99.4% versus 98.2% on Wednesday, while the 30-year muni to Treasury ratio stood at 108.1% compared to 107.4%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $3.666 billion to $9.020 billion on Thursday. The total is comprised of $2.995 billion competitive sales and $6.025 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 41,003 trades on Wednesday on volume of $9.307 billion. Most active on Wednesday, based on the number of trades, was the Missouri State Development Finance Board (Branson Landing) infrastructure facilities revenue bond 4s of 2034, which traded 161 times at an average price of 99.947, with an average yield of 3.976%.
Tax-Exempt Money Market Fund Flows Reverse
Tax-exempt money market funds fell $1.79 billion, bringing total net assets to $259.35 billion in the period ended March 2, according to The Money Fund Report, a service of iMoneyNet.com. This follows an inflow of $1.98 billion to $161.14 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 96th straight week.
The total net assets of the 991 weekly reporting taxable money funds fell $4.06 billion to $2.437 trillion in the period ended March 3, after an inflow of $8.75 billion to $2.441 trillion in the prior week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the seventh consecutive week.
Overall, the combined total net assets of the 1,387 weekly reporting money funds decreased $5.85 billion to $2.696 trillion in the period ended March 3, which followed an inflow of $10.73 billion to $2.702 trillion in the prior period.
S&P Indices: Best & Worst in Feb.
Out of the 54 states and territories included in the S&P Municipal Bond Index, New Jersey was the worst performer in February, according to J.R. Rieger, Global Head of Fixed Income at S&P Dow Jones Indices.
For February, the S&P Municipal Bond N.J. Index returned -1.24%; for the year to date, the index returned +0.39%.
The best performer in the S&P Muni Index last month was Puerto Rico, which returned -0.05%; for the year to date, the S&P Municipal Bond Puerto Rico Index returned -0.27%.
