Munis were stronger on Thursday afternoon, according to traders, as yields on some maturities were as many as four basis points lower, as the last of the week's supply trickled in.
Primary Market
Well Fargo priced the Norman, Okla., Regional Hospital Authority's $132.175 million of hospital revenue refunding bonds for the Norman Regional Hospital Authority Obligated Group. The bonds were priced to yield from 1.29% with a 3% coupon in 2017 to 3.27% with a 5% coupon in 2031. A term bond in 2037 was priced to yield 3.89% with a 4% coupon. The deal is rated Baa1 by Moody's Investors Service and BBB-plus by S&P Global Ratings.
Loop Capital Markets was expected to price the Pennsylvania Turnpike Commission's $197.455 million of subordinate revenue bonds but the underwriter announced the deal has been postponed to "a future date that has not yet been scheduled."
In the competitive arena, the state of Virginia sold $184.86 million of general obligation and refunding bonds. Wells Fargo won the bidding with a true interest cost of 2.15%. The $70.815 million new money bonds were priced to yield from 0.69% with a 5% coupon in 2017 to 3.00% with a 3% coupon in 2036. The $114.045 million refunding bonds were priced to yield from 0.69% with a 5% coupon in 2017 to 2.90% with a 3% coupon in 2034. The deal is rated triple-A by Moody's, S&P and Fitch Ratings.
Since 2006, the commonwealth of Virginia has sold roughly $2.67 billion of securities, with the largest issuance occurring in 2009, when it sold $412 million. The lowest issuance was in 2012, when the Old Dominion state sold just $95 million.
Also, the Orange County, Calif., Sanitation District auctioned $107.4 million of revenue refunding certificate of anticipation notes, which were won by Bank of America Merrill Lynch with a TIC of 0.87%. The deal is rated triple-A by S&P and Fitch.
Monroe County, N.Y., auctioned $95.5 million of public improvement serial bonds, which were won by JPMorgan with a TIC of 2.48%. The bonds were priced to yield from 1.00% with a 3% coupon in 2017 to 3.36% with a 3.25% coupon in 2036. The deal is rated Baa1 by Moody's and A by S&P, with the exception of $61.93 million maturing 2021 through 2036 that is insured by Assured Guaranty.
Secondary Market
Top-shelf municipal bonds were mostly stronger on Thursday around midday, as the yield on the 10-year benchmark muni general obligation was as much as one basis point lower from 1.73% on Wednesday, while the yield on the 30-year was also as much as two basis points lower from 2.56%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were mostly stronger on Thursday morning. The yield on the two-year Treasury was up to 0.81% from 0.80% on Wednesday, the 10-year Treasury yield was lower at 1.74% from 1.75% and the yield on the 30-year Treasury bond decreased to 2.49% from 2.51%.
On Wednesday, the 10-year muni to Treasury ratio was calculated at 98.9% compared to 99.1% on Tuesday, while the 30-year muni to Treasury ratio stood at 101.8% versus 102.0%, according to MMD.
Tax-Exempt Money Market Fund Inflows
Tax-exempt money market funds experienced inflows of $290.6 million, bringing total net assets to $127.64 billion in the week ended Oct. 17, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $1.96 billion to $127.35 billion in the previous week. This marks the first time this category has posted gains since the week of March 7.
The average, seven-day simple yield for the 242 weekly reporting tax-exempt funds dropped to 0.32% from 0.34% in the previous week.
The total net assets of the 860 weekly reporting taxable money funds decreased $7.51 billion to $2.469 trillion in the week ended Oct. 18, after an outflow of $16.87 billion to $2.477 trillion the week before.
The average, seven-day simple yield for the taxable money funds increased to 0.14% from 0.13% the prior week.
Overall, the combined total net assets of the 1,102 weekly reporting money funds fell $7.22 billion to $2.597 trillion in the period ended Oct. 18, which followed an outflow of $18.83 billion to $2.604 trillion.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 43,702 trades on Wednesday on volume of $14.963 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $1.90 billion to $17.54 billion on Thursday. The total is comprised of $4.11 billion of competitive sales and $13.43 billion of negotiated deals.
