Top-quality municipal bonds were stronger at mid-session, according to traders, as the Dormitory Authority of the State of New York competitively sold over $1 billion of bonds.
Secondary Market
The yield on the 10-year benchmark muni general obligation fell by as much as two basis points from 1.57% on Wednesday, while the yield on the 30-year decreased as much as two basis points from 2.33%, according to a read of Municipal Market Data's triple-A scale.
Treasuries were stronger on Thursday. The yield on the two-year Treasury declined to 0.76% from 0.79% on Wednesday, the 10-year Treasury yield dropped to 1.61% from 1.68% and the yield on the 30-year Treasury bond decreased to 2.33% from 2.41%.
On Wednesday, the 10-year muni to Treasury ratio was calculated at 94.2% compared to 93.0% on Tuesday, while the 30-year muni to Treasury ratio stood at 93.5% versus 95.8%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,630 trades on Wednesday on volume of $16.12 billion.
Primary Market
In the competitive arena on Thursday, DASNY sold $1.09 billion of bonds in three separate offerings.
JPMorgan Securities won the $400 million Series 2016A Group A state sales tax revenue bonds with a true interest cost of 1.39%. Pricing information was not immediately available.
Bank of America Merrill Lynch won the $387.14 million of Series 2016A Group C state sales tax revenue bonds with a TIC of 3.18%. The issue was priced as 5s to yield from 2.13% in 2032 to 2.32% in 2036.
BAML also won the $303.33 million of Series 2016A Group B state sales tax revenue bonds with a TIC of 2.43%. The issue was priced as 5s to yield from 1.74% in 2027 to 2.07% in 2031.
The sales are rated triple-A by S&P Global Ratings and AA-plus by Fitch Ratings.
Since 2006, DASNY has sold over $9 billion of competitive offerings. DASNY saw the most issuance was in 2015 when it put $2.11 billion of bonds out for the bid. The authority did not competitively sell bonds in 2008 or 2009.
In the negotiated sector, BAML priced the Central Florida Expressway's $525.08 million of Series 2016B senior lien refunding revenue bonds.
The issue was priced to yield from 0.83% with a 3% coupon in 2017 to 3.07% with a 4% coupon in 2040. The issue is rated A2 by Moody's and A by S&P and Fitch except for split halves of the 2036 and 2037 maturities which are insured by Assured Guaranty Municipal and rated A2 by Moody's and AA by S&P.
Goldman Sachs priced the Pennsylvania Turnpike Commission's subordinate revenue refunding bonds, Third Series of 2016.
The $245.24 million of Subseries A bonds were priced as 5s to yield 2.34% in 2026, 2.48% in 2027, 2.73% in 2030, and 2.78% in 2031; as 4s to yield 3.24%, as 5s to yield 2.94% in a split 2034 maturity, as 5s to yield 2.99% in 2035, as 5s to yield 3.03% in 2036, as 3 3/8s to yield 3.53% and as 4s to yield 3.43% in a split 2041 maturity.
The issue is rated A3 by Moody's and A-minus by Fitch.
The commission is also expected to offer Subseries B taxable bonds and motor license fund enhanced bonds.
Citigroup is expected to price the Atlantic County Improvement Authority, N.J.'s $123 million of bonds for Stockton University's Atlantic City campus. NW Financial is financial advisor and Archer & Greiner is bond counsel.
Thursday's borrowing features two negotiated transactions including $74.6 million of Series 2016A general obligation lease revenue bonds backed by university rent revenues. An additional $48.4 million of Series 2016B county guaranteed revenue bonds supported by economic tax credits will also be sold.
The deals are insured by AGM. The Series 2016A bonds have ratings of Baa1 by Moody's and A by Fitch while the Series 2016B bonds have ratings of Aa2 by Moody's and AA by S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $423.5 million to $12.74 billion on Thursday. The total is comprised of $4.245 billion of competitive sales and $8.497 billion of negotiated deals.
Tax-Exempt Money Market Fund Outflows
Tax-exempt money market funds experienced outflows of $5.53 billion, bringing total net assets to $139.53 billion in the week ended Sept. 19, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $5.27 billion to $145.06 billion in the previous week.
The average, seven-day simple yield for the 252 weekly reporting tax-exempt funds rose to 0.21% from 0.18% in the previous week.
The total net assets of the 886 weekly reporting taxable money funds decreased $23.27 billion to $2.504 trillion in the week ended Sept. 20, after an inflow of $13.91 billion to $2.527 trillion the prior before.
The average, seven-day simple yield for the taxable money funds remained at 0.12% from the week before.
Overall, the combined total net assets of the 1,138 weekly reporting money funds fell $28.80 billion to $2.644 trillion in the period ended Sept. 13, which followed an inflow of $8.64 billion to $2.672 trillion.
