Top quality municipal bonds were mixed at mid-session, said traders who were eying next week's $8.5 billion new issue slate.
Ipreo estimates next week's bond volume at $8.45 billion, down from $11.31 billion this week, according to revised data from Thomson Reuters. The upcoming calendar is composed of $6.29 billion of negotiated deals and $2.16 billion of competitive sales.
Secondary Market
The yield on the 10-year benchmark muni general obligation on Friday fell by as much as one basis point from 1.57% on Thursday, while the yield on the 30-year was steady from 2.31%, according to a read of Municipal Market Data's triple-A scale.
Treasuries were narrowly mixed on Friday. The yield on the two-year Treasury rose to 0.76% from 0.73% on Thursday, the 10-year Treasury yield fell to 1.69% from 1.70% and the yield on the 30-year Treasury bond decreased to 2.45% from 2.48%.
On Thursday, the 10-year muni to Treasury ratio was calculated at 92.6% compared to 92.4% on Wednesday, while the 30-year muni to Treasury ratio stood at 93.6% versus 93.3%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,872 trades on Thursday on volume of $16.91 billion.
Week's Most Actively Traded Issues
Some of the most actively traded issues by type in the week ended Sept. 16 were from California and Michigan issuers, according to Markit.
In the GO bond sector, the Los Angeles, Calif. 2s of 2017 were traded 29 times. In the revenue bond sector, the Michigan Finance Authority 4s of 2046 were traded 52 times. And in the taxable bond sector, the Calif. Department of Water Resources 2s of 2022 were traded 61 times.
Week's Most Actively Quoted Issues
Puerto Rico and California issues were among the most actively quoted bonds in the week ended Sept. 16, according to Markit.
On the bid side, the Puerto Rico Commonwealth GO 8s of 2035 were quoted by 12 unique dealers. On the ask side, the California HFFA revenue 3s of 2047 were quoted by 21 unique dealers. And among two-sided quotes, the California GO 5s of 2026 were quoted by 16 unique dealers.
Week's Primary Market
Goldman Sachs priced the New York Metropolitan Transportation Authority's $1.06 billion of Hudson Rail Yards trust obligation bonds.
The deal, which traders said was warmly received, is rated A2 by Moody's Investors Service and A-minus by Kroll Bond Rating Agency.
Ramirez & Co. priced the New York City Transitional Finance Authority's $800 million of tax-exempt Fiscal 2017 Series B Subseries B-1 future secured subordinate bonds for institutions after holding a two-day retail order period.
The TFA said it received about $219 million of retail orders for the tax-exempt bonds during the two-day retail order period, of which about $195 million was accepted.
"At the final pricing, strong institutional investor demand made it possible to reduce yields by 1-2 basis points in five maturities," the TFA said in a statement.
The NYC TFA also competitively sold two taxable bond deals. JPMorgan Securities won the TFA's $187.51 million of Fiscal 2017 Series B Subseries B-2 future secured subordinate bonds with a true interest cost of 2.22%. Jefferies won the TFA's $62.5 million of Fiscal 2017 Series B Subseries B-3 future secured subordinate bonds with a TIC of 2.77%.
The TFA said the Subseries B-2 bonds attracted 10 bidders while the Subseries B-3 bonds attracted 11 bidders.
The deals are rated Aa1 by Moody's and triple-A by S&P Global Ratings and Fitch Ratings.
Goldman priced the San Francisco Airport Commission's $887.92 million of Series 2016B second series revenue bonds subject to the alternative minimum tax, Series 2016C non-AMT governmental purpose and refunding bonds and Series 2016D non-AMT governmental purpose bonds. The deal is rated A1 by Moody's and A-plus by S&P and Fitch.
Goldman also priced the Michigan Finance Authority's $850.49 million of Series 2016 hospital revenue refunding bonds for the Henry Ford Health System. The deal is rated A3 by Moody's and A by S&P.
And Goldman priced the California Department of Water Resources' $567.86 million of taxable power supply revenue bonds. The deal is rated Aa1 by Moody's, AA by S&P and AA-plus by Fitch.
Citigroup priced King County, Wash.'s $500.89 million of Series 2016B sewer improvement and refunding revenue bonds. The deal is rated Aa2 by Moody's and AA-plus by S&P.
Citi priced the New York Convention Center Development Corp.'s $420.21 million of hotel unit fee secured revenue bonds consisting of Series 2016A senior liens and Series 2016B subordinated liens. The Series A bonds are rated Aa3 by Moody's while the Series B bonds are rated A2 by Moody's.
Citi priced the Dallas Area Rapid Transit's $229.72 million of Series 2016B senior lien sales tax revenue refunding bonds. The deal is rated Aa2 by Moody's and AA-plus by S&P.
Wells Fargo Securities priced Rochester, Minn.'s $218.24 million of Series 2016B healthcare facilities revenue bonds for the Mayo Clinic. The deal is rated Aa2 by Moody's and AA by S&P.
JPMorgan priced Louisiana's $211.8 million of Series 2016A general obligation bonds. The deal is rated Aa3 by Moody's, AA by S&P and AA-minus by Fitch.
Morgan Stanley priced the Massachusetts Development Finance Agency's $177.35 million of Series 2016E bonds for the Boston Medical Center. The deal is rated Baa2 by Moody's and BBB by S&P.
Wells Fargo priced the county of Mecklenburg, N.C.'s $148.53 million of GO refunding bonds. The deal is rated triple-A by Moody's, S&P and Fitch.
Citi priced the Tennessee Housing Development Agency's $125 million of residential finance program bonds consisting of Issue 2016-2A subject to the alternative minimum tax and Issue 2016-2B non-AMT bonds. The deal was rated Aa1 by Moody's and AA-plus by S&P.
In the competitive arena, the Virginia Public Building Authority sold three separate issues totaling $550 million. Wells Fargo won the $385.92 million of Series 2016A public facilities revenue bonds and Series 2016B refunding bonds with a TIC of 2.22%. JPMorgan won the $147.43 million of Series 2016C public facilities revenue bonds subject to the alternative minimum tax with a TIC of 2.88%. Raymond James won the $13.72 million of Series 2016D taxable public facilities revenue bonds with a TIC of 3.56%. All three sales are rated Aa1 by Moody's and AA-plus by S&P and Fitch.
Paulding County, Ga., sold $150.43 million of Series 2016 water and sewerage revenue improvement and refunding bonds. Bank of America Merrill Lynch won the bonds with a TIC of 2.86%. The deal is rated Aa3 by Moody's and AA by S&P.
The Louisville/Jefferson County Metro Government, Ky., sold $147.49 million of bonds in two separate offerings. Citi won the $89.5 million of Series 2016 general obligation bonds for the City Center project with a TIC of 2.91%. JPMorgan won the $57.99 million of Series 2016A GOs with a TIC of 1.81%. Both deals are rated Aa1 by Moody's, AA-plus by S&P and AAA by Fitch.
Seattle, Wash., sold $151 million of Series 2016C municipal light and power improvement and refunding revenue bonds. Citi won the deal with a TIC of 2.94%. The deal is rated Aa2 by Moody's and AA by S&P.
Rutherford County, Tenn., competitively sold $101 million of Series 2016B general obligation public improvement and school bonds. FTN Financial won the deal with a TIC of 2.36%. The deal is rated Aa1 by Moody's and AA-plus by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $776 million to $13.06 billion on Friday. The total is comprised of $3.82 billion of competitive sales and $9.24 billion of negotiated deals.
Lipper Reports More Inflows
For the 50th straight week, municipal bond funds reported inflows, according to Lipper data released on Thursday. The weekly reporters saw $485.522 million of inflows in the week ended Sept. 14, after inflows of $985.786 million in the previous week, Lipper said.
The four-week moving average remained positive at $675.129 million after being in the green at $818.423 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 experienced inflows, gaining $419.949 million in the latest week after inflows of $617.231 million in the previous week. Intermediate-term funds had inflows of $176.075 million after inflows of $182.862 million in the prior week.
National funds had inflows of $360.119 million on top of inflows of $912.909 million in the previous week. High-yield muni funds reported inflows of $175.483 million in the latest reporting week, after inflows of $264.215 million the previous week.
Exchange traded funds saw outflows of $14.231 million, after outflows of $71.151 million in the previous week.
