Top-quality municipal bonds were unchanged at mid-session, traders said, as three large deals from the Land of Lincoln dominated the new issue slate, led off by the $1 billion deal for O'Hare International Airport.
Primary Market
Bank of America Merrill Lynch priced Chicago's $1.02 billion of O'Hare airport senior lien revenue refunding bonds.
The $27.41 million of Series 2016A bonds, subject to the alternative minimum tax, were priced as 5s to yield from 1.62% in 2020 to 3.53% in 2037. A 2017 maturity was offered as a sealed bid.
The $463.19 million of Series 2016B non-AMT bonds were priced to yield from 1% with a 5% coupon in 2018 to 3.29% with a 5% coupon in 2039; a 2041 maturity was priced as 5s to yield 3.31%. A 2017 maturity was offered as a sealed bid.
The $527.48 million of Series 2016C non-AMT bonds were priced as 5s to yield from 1.18% in 2019 to 3.26% in 2038. A 2017 maturity was offered as a sealed bid.
The deal is rated A by S&P Global Ratings and Fitch Ratings.
BAML also priced the Illinois Finance Authority's $107.98 million of Series 2016A tax-exempt bonds for the Swedish Covenant Hospital.
The issue was priced to yield from 1.47% with a 5% coupon in 2017 to 3.90% with a 5% coupon in 2037; a 2040 maturity was priced as 4 1/8s to yield 4.32%.
The deal is rated BBB by S&P and BBB-plus by Fitch.
In the competitive arena, the state of Illinois sold $480 million of Series of November 2016 general obligation bonds.
BAML won the bonds with a true interest cost of 2.45%. The issue was priced as 5s to yield from 1.94% in 2017 to 4.48% in 2041.
The deal is rated Baa2 by Moody's, BBB by S&P and BBB-plus by Fitch.
Since 2006, the state of Illinois has issued roughly $29.9 billion of securities, with the highest amount coming in 2010 when the state sold a whopping $8.7 billion. The Prairie State did not issue any bonds in 2015. Thursday's sale puts the state over $3 billion of issuance for the year, the first time it has issued that much since 2013.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $981.5 million to $8.63 billion on Thursday. The total is comprised of $2.25 billion of competitive sales and $6.38 billion of negotiated deals.
Secondary Market
The yield on the 10-year benchmark muni general obligation was flat from 1.70% on Wednesday, while the yield on the 30-year was steady from 2.53%, according to a read of Municipal Market Data's triple-A scale.
U.S. Treasuries were narrowly mixed on Thursday. The yield on the two-year fell to 0.81% from 0.82% on Wednesday, the 10-year Treasury rose to 1.81% from 1.80% and the yield on the 30-year Treasury bond increased to 2.59% from 2.56%.
On Wednesday, the 10-year muni to Treasury ratio was calculated at 94.7% compared to 95.6% on Tuesday, while the 30-year muni to Treasury ratio stood at 98.8% versus 99.6%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 41,257 trades on Wednesday on volume of $15.88 billion.
Tax-Exempt Money Market Fund Outflows
Tax-exempt money market funds experienced outflows of $60.2 million, bringing total net assets to $128.15 billion in the week ended Oct. 31, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $568.9 billion to $128.21 billion in the previous week.
The average, seven-day simple yield for the 238 weekly reporting tax-exempt funds dropped to 0.20% from 0.25% in the previous week.
The total net assets of the 861 weekly reporting taxable money funds increased $17.42 billion to $2.504 trillion in the week ended Nov. 1, after an inflow of $17.71 billion to $2.487 trillion the week before.
The average, seven-day simple yield for the taxable money funds gained to 0.14% from 0.13% the prior week.
Overall, the combined total net assets of the 1,099 weekly reporting money funds rose $17.36 billion to $2.632 trillion in the period ended Nov. 1, which followed an inflow of $18.28 billion to $2.615 trillion.
