Munis Weaken; Energy Northwest Priced

Prices of top-shelf municipal bonds were weaker at mid-session, traders said, with yields on some maturities up by as much as two basis points.

In the primary, JPMorgan priced Energy Northwest's electric bonds for institutions after a one-day retail order period.

Secondary Market

Prices of top-shelf municipal bonds were weaker. The yield on the 10-year benchmark muni general obligation was up as much as one basis point from 2.00% on Wednesday, while the yield on the 30-year GO was up by as much as two basis points from 2.91%, according to a read of Municipal Market Data's triple-A scale.

Treasury prices were unchanged on Thursday as the yield on the two-year Treasury note was steady at 0.54% from Wednesday, while the 10-year yield was flat at 1.97% and the 30-year yield remained at 2.65%.

The 10-year muni to Treasury ratio was calculated on Wednesday at 101.5% versus 100.3% on Tuesday, while the 30-year muni to Treasury ratio stood at 109.7% compared to 109.6%.

Primary Market

On Thursday, JP Morgan priced $514.86 million of Energy Northwest's electric revenue and refunding bond deal for institutions after a one-day retail order period.

The $114.230 million of Series 2015-A Project 1 electric revenue refunding bonds priced as 5s to yield 1.96% and 2.66% in a split 2027 maturity and as 5s to yield 2.78% and 2.08% in a split 2028 maturity.

The $321.505 million of Series 2015-A Columbia Generating Station electric revenue and refunding bonds were priced to yield from 1.62% with a 5% coupon in 2021 to 2.20% with a 5% coupon in 2024; the bonds were also priced as 5s to yield 2.85% in 2029 and as 4s and 5s to yield 3.55% and 3.15% in a split 2035 maturity. A 2038 split term bond was priced as 4s and 5s to yield 3.63% and 3.23%.

The $79.12 million of Series 2015-A Project 3 electric revenue refunding bonds, were priced as 3s to yield 0.64% in 2017; as 4s to yield 0.97% in 2018; as 5s to yield 2.33% in 2025 and as 5s to yield 2.51% in 2026.

On Wednesday, the $114.23 million of Series 2015-A Project 1 electric revenue refunding bonds were priced for retail as 5s to yield 1.86% in a 2027 split maturity; no retail orders were taken for the other half of the 2027 maturity or for a 2028 maturity.

The $321.51 million of Series 2015-A Columbia Generating Station electric revenue and refunding bonds were priced for retail to yield from 1.59% with a 5% coupon in 2021 to 2.13% with a 5% coupon in 2024; the bonds were also priced as 5s to yield 2.24% in a 2032 split maturity and as 5s to yield 3.07% in a 2035 split maturity. The other halves of the 2032 and 2035 maturities, as well as the 2029-2031, 2033-2034 and a term bond in 2038 were not offered to retail.

The $79.12 million of Series 2015-A Project 3 electric revenue refunding bonds, were priced for retail as 3s to yield 0.64% in 2017 and as 4s to yield 0.96% in 2018. A 2025 split maturity was priced as 4s and 5s to yield 2.26%. No retail orders were taken for the 2026 maturity.

The bonds are rated Aa1 by Moody's Investors Service, AA-minus by Standard and Poor's and AA by Fitch Ratings.

In the competitive arena on Thursday, the North Texas Municipal Water District sold $302.13 million of Series 2015 water system revenue refunding and improvement bonds. Barclays Capital won the deal with a true interest cost of 3.4777%. The bonds were priced to yield from 0.16% with a 3% coupon in 2015 to 3.03% with a 5% coupon in 2036; a 2044 term was priced as 4s to yield 3.60%. The issue is rated Aa2 by Moody's and triple-A by S&P.

The district last sold bond competitively on June 28, 2012, when Bank of America Merrill Lynch won $358.84 million of Series 2012 water system revenue refunding and improvement bonds with a TIC of 2.9508%.

RBC Capital Markets priced the New Jersey Economic Development Authority's $124.92 million of revenue bonds for the Provident Group-Rowan Properties' Rowan University student housing project. The $121.93 million Series 2015A bonds were priced as 5s to yield from 2.60% in 2021 to 3.39% in 2025; 3.86% in 2030; 4.07% in 2035; and 4.25% in 2048. The $3 million Series 2015B taxable bonds were priced as a 2021 bullet maturity as 4s to yield 4.125%. The issue is rated Baa3 by Moody's and BBB-minus by S&P.

JPMorgan received the written award on Allen County, Ohio's $159.02 million of Series 2015A hospital facilities revenue refunding improvement bonds for Mercy Health. The bonds were priced as 5s to yield 3.69% in 2043, as 4s to yield 4.20% in 2044 and as 4 1/4s to yield 4.26% in 2045. JPMorgan also got the official award on $100 million of Series 2015B adjustable-rate hospital facilities revenue bonds for Mercy Health. The bonds were priced as a 2035 bullet maturity at par to yield 75 basis points over the SIFMA rate. Both issues are rated A1 by Moody's and AA-minus by S&P and Fitch.

Bank of America Merrill Lynch received the official award on the Washington Health Care Facilities Authority's $103.90 million of Series 2015 revenue bonds for the Central Washington Health Services Association. The bonds were priced to yield from 0.64% with a 3% coupon to 3.80% with a 5% coupon in 2030; a 2036 term bond was priced as 4s to yield 4.23% and a 2039 term was priced as 5s to yield 4.11%. The issue is rated Baa1 by Moody's and BBB-plus by Fitch.

Tax-Exempt Money Market Funds Post Outflow

Tax-exempt money market funds had an outflow of $5.71 billion, bringing total net assets to $250.04 billion in the period ended April 20, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $3.74 billion to $255.76 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 103rd straight week.

The total net assets of the 991 weekly reporting taxable money funds fell $10.44 billion to $2.374 trillion in the period ended April 21, after experiencing an outflow of $26.85 billion to $2.385 trillion in the prior week.

The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 13th consecutive week.

Overall, the combined total net assets of the 1,387 weekly reporting money funds decreased $16.15 billion to $2.624 trillion in the period ended April 21, which followed an outflow of $30.60 billion to $2.641 trillion in the prior period.

Bond Buyer Visible Supply

The Bond Buyer's 30-day visible supply calendar decreased $1.183 billion to $8.299 billion on Thursday. The total is comprised of $3.575 billion competitive sales and $4.725 billion of negotiated deals.

MSRB Previous Session's Activity The Municipal Securities Rulemaking Board reported 41,377 trades on Wednesday on volume of $13.698 billion.

The most active bond, based on the number of trades, was the California 2015 various purpose refunding 3 1/2s of 2035, which traded 246 times at an average price of 99.634 with an average yield of 3.518%. The bonds were initially priced at par to yield 3.50%.

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