Prices of top-quality municipal bonds were steady at mid-session, traders said, in very quiet pre-holiday trade. The bond markets are closed on Friday in observance of the Independence Day holiday. Trading will resume on Monday.
Volume for next week was estimated at $4.9 billion by Ipreo, consisting of $3.6 billion of negotiated deals and $1.3 billion of competitive sales. This compares to a revised total of $3.6 billion this week, according to Thomson Reuters, which consisted of $2.8 billion of negotiateds and $723 million of competitives.
Secondary Trading
The yield on the 10-year benchmark muni general obligation on Thursday was flat from 2.32% on Wednesday, while the yield on the 30-year GO was unchanged at 3.33%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were higher on Thursday with the yield on the two-year Treasury note falling to 0.63% from 0.68% on Wednesday, while the 10-year yield fell to 2.38% from 2.43% and the 30-year yield decreased to 3.17% from 3.20%.
The 10-year muni to Treasury ratio was calculated on Wednesday at 96.0% versus 97.6% on Tuesday, while the 30-year muni to Treasury ratio stood at 104.3% compared to 105.6%, according to MMD.
Puerto Rico GOs Firm
Prices of Puerto Rico debt were firm on Thursday. Puerto Rico bonds moved higher on Wednesday after plunging in Monday and Tuesday trading following a published report that quoted Gov. Alejandro García Padilla as saying the commonwealth couldn't pay its $72 billion in debt.
The Puerto Rico commonwealth Series 2014A general obligation 8s of 2035 on Thursday were trading as low as 68.045 cents on the dollar, a high yield of 12.339%, according to the Municipal Securities Rulemaking Board's EMMA website. There were nine trades totaling $14.5 million.
On Wednesday, the GO 8s of 2035 were trading as low as 68.25 cents on the dollar, a high yield of 12.301%; there were 30 trades totaling $41.9 million. In trading on Tuesday, when the GOs traded as low as 64 cents on the dollar, a high yield of 13.13%, in 110 trades totaling $223 million. On Monday, the GOs traded as low as 68.30 cents on the dollar, a high yield of 12.291%, in 93 trades totaling $141 million. This contrasts to last Friday, the GOs traded as low as 76.75, a high yield of 10.874%; there were 19 trades totaling $22 million.
Separately on Thursday, the commonwealth Series 2012A GO public improvement 5s of 2041 also rose from Wednesday and were trading as low as 58.775 cents on the dollar, according to EMMA, a high yield of 9.197% in 11 trades totaling $4.2 million.
On Wednesday, the 5s of 2041 were trading as low as 57.25 cents on the dollar, a high yield of 9.439%, in 85 trades totaling $43.3 million. On Tuesday, the bonds were trading as low as 51.625 cents, a high yield of 10.434%, in 125 trades totaling $44.3 million. On Monday, the bonds traded at a low price of 51.716, a high yield of 10.416%, in 48 trades totaling $26.6 million. On Friday, the bonds traded as low as 63.033, a high yield of 8.571% in 33 trades totaling $15.4 million, according to EMMA.
Primary Market
Topping next week's calendar is the North Carolina Municipal Power Agency Number 1's $463 million of refunding bonds scheduled to be priced by Morgan Stanley on Thursday. The issue is initially structured as Series 2015 A, B and C refunding bonds, Series 2015 D taxable refunding bonds and Series 2015 E forward delivery bonds. The issue is rated A by Standard & Poor's and Fitch Ratings.
The Illinois State Toll Highway Authority's $400 million of Series 2015A toll highway senior revenue bonds are expected to be priced by Bank of America Merrill Lynch on Wednesday. The bonds are rated Aa3 by Moody's Investors Service and AA-minus by S&P and Fitch.
JPMorgan is slated to price Austin, Texas' $290 million of Series 2015A and taxable Series 2015B wastewater system revenue refunding bonds on Wednesday. The issue is initially structured as serials maturing from 2016 through 2035. The bonds are rated Aa2 by Moody's, AA by S&P and AA-minus by Fitch.
Citigroup is expected to price on Thursday the Colorado Health facilities Authority's $206 million of Series 2015A health facilities revenue and revenue refunding bonds for the Evangelical Lutheran Samaritan Society project. The bonds are rated A-minus by Fitch.
Citi is also set to price the Massachusetts Port Authority's $179 million of Series 2015A non-AMT and Series 2015B AMT revenue bonds on Wednesday. The bonds are rated AA by S&P.
RBC Capital Markets is slated to price on Wednesday the Desert Sands Unified School District, Calif.'s $157 million of Series 2015 election of 2014 general obligation bonds and Series 2015 GO refunding bonds.
In the competitive sector, the Central Florida Expressway Authority is set to sell $194 million of Series 2015 senior lien revenue bond anticipation notes on Wednesday. The BANs are rated A2 by Moody's and A by S&P and Fitch.
The city and county of San Francisco is set to sell two separate issues of certificates of participation totaling about $135 million on Wednesday. The sales consist of $111 million of Series 2015A COPs for the War Memorial Veterans Building seismic upgrade and improvements and $24 million of Series 2015B taxable COPs for the War Memorial Veterans Building seismic upgrade and improvements. The issues are rated Aa3 by Moody's, AA by S&P and AA-minus by Fitch.
Hillsborough County, Fla., is set to sell $140 million of Series 2015 community investment tax refunding revenue bonds on Wednesday. The bonds are rated AA2 by Moody's.
The Metropolitan Council of Minnesota is slated to sell three separate issues of general obligation bonds totaling $151 million on Wednesday. The sales consist of $100 million Series 2015C GO wastewater revenue bonds, $45 million of Series 2015A GO transit bonds and $$6 million of Series 2015B GO park bonds.
The Clark County Water District, Nev., will sell $100 million of Series 2015 limited tax GO water reclamation refunding bonds, which are additionally secured by pledged revenues. The issue is rated Aa1 by Moody's and triple-A by S&P.
The Week's Most Actively Quoted Issues
Puerto Rico was one of the most actively quoted names in the week ended July 2, according to data released by Markit.
On the bid side, the Puerto Rico commonwealth GO 8s of 2035 were quoted by 19 unique dealers. On the ask side, the commonwealth GO 8s of 2035 were quoted by 16 dealers. And among two-sided quotes, the commonwealth GO 8s of 2035 were quoted by 26 dealers, Markit said.
The Week's Most Actively Traded Issues
Some of the most actively traded issues in the week ended July 2 were in Puerto Rico, New York and California, according to Markit.
In the revenue bond sector, the New York City Transitional Finance Authority's BARB 4s of 2044 were traded 60 times. In the GO bond sector, the Puerto Rico commonwealth GO 8s of 2035 were traded 171 times. And in the taxable bond sector, the Industry Public Facilities Authority, Calif., tax allocation revenue 5 3/4s of 2024 were traded 20 times, according to Markit.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 43,583 trades on Wednesday on volume of $11.349 billion.
The most active bond, based on the number of trades, was the Miami-Dade County, Fla., Series 2015A aviation revenue and revenue refunding 4 1/4s of 2036, which traded 179 times at an average price of 99.735 with an average yield of 4.268%. The bonds were initially priced at 98.073 to yield 4.39%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $3.52 billion to $9.09 billion on Thursday. The total is comprised of $3.08 billion competitive sales and $6.01 billion of negotiated deals.
