The New York Metropolitan Transportation Authority competitively sold $471.31 million of bonds to Bank of America Merrill Lynch on Thursday, while Cook County, Ill., issued bonds in the primary.

Primary market
In the competitive arena, the New York Metropolitan Transportation Authority sold $471.31 million of mandatory tender bonds in two separate sales.

Bank of America Merrill Lynch won the $276.61 million of Series 2018A-2 transportation revenue bonds with a true interest cost of 1.9074%. The bonds were priced as 5s to yield 1.88% in 2048 with a mandatory tender date of 2022.

BAML also won the $194.7 million of Subseries 2018A-1 transportation revenue bonds with a TIC of 1.7972%. The bonds were priced as 5s to yield 1.75% in 2045 with a mandatory tender date of 2020.

The deals are rated A1 by Moody’s Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings.

Loop Capital Markets priced Cook County, Ill.’s $103.15 million of Series 2018 GO refunding bonds. The issue was priced to yield from 1.63% with a 3% coupon in 2018 to 2.34% with a 5% coupon in 2022. A 2034 maturity was priced as 5s to yield 3.35% and a 2035 maturity was priced as 5s to yield 3.38%. The deal is rated A2 by Moody’s, AA-minus by S&P and A-plus by Fitch.

Since 2008, Cook County has sold about $3.27 billion of bonds, with the most issuance occurring in 2010 when it sold $810 million. The county did not come to market at all in 2015.

Piper Jaffray priced the Pasadena Independent School District, Texas’ $120.095 million of Series 2018 unlimited tax school building bonds.

The issue was priced to yield from 1.47% with a 5% coupon in 2019 to 2.88% with a 5% coupon in 2040. A 2044 term bond was priced as 4s to yield 3.25%.

The deal is backed by PSF and rated triple-A by Moody’s and S&P.

Also in the competitive sector, the Prior Lake Independent School District No. 719, Minn., sold $125 million of GOs in two separate sales.

Morgan Stanley won the $65 million of Series 2018A GO school building bonds with a TIC of 3.1758% and Wells Fargo Securities won the $60 million of Series 2018B GO school building capital appreciation bonds with a TIC of 2.7620%.

The deals are backed by the Minnesota School District Credit Enhancement Program.

Secondary market
The MBIS municipal non-callable 5% GO benchmark scale was mixed in late trading.

The 10-year muni benchmark yield rose to 2.355% on Thursday from the final read of 2.337% on Wednesday, according to Municipal Bond Information Services. The MBIS 30-year benchmark muni yield fell to 2.830% from 2.845%.

The MBIS benchmark index is updated hourly on the Bond Buyer Data Workstation.

“Since there's not very many new issues, customers are feeding off the secondaries," said one New York trader. “Looks like the action in the primary should pick up a little next week.”

Top-rated municipal bonds finished weaker on Thursday. The yield on the 10-year benchmark muni general obligation rose two basis points to 2.12% from 2.10% on Wednesday, while the 30-year GO yield gained two basis points to 2.71% from 2.69%, according to the final read of MMD’s triple-A scale.

U.S. Treasuries were mixed in late activity. The yield on the two-year Treasury fell to 2.04% on Thursday from 2.05% on Wednesday, the 10-year Treasury yield rose to 2.61% from 2.58% and the yield on the 30-year Treasury increased to 2.89% from 2.85%.

On Thursday, the 10-year muni-to-Treasury ratio was calculated at 81.3% compared with 78.0% on Wednesday, while the 30-year muni-to-Treasury ratio stood at 93.9% versus 92.6%, according to MMD.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 45,769 trades on Wednesday on volume of $11.54 billion.

Treasury sells TIPS, announces auction details
The Treasury Department on Thursday announced these upcoming auctions:

  • $48 billion 91-day bills on Jan. 22;
  • $42 billion 182-day bills on Jan. 22;
  • $26 billion two-year notes on Jan. 23;
  • $34 billion five-year notes on Jan. 24;
  • $15 billion two-year floating rate notes on Jan. 24; and
  • $28 billion seven-year notes on Jan. 25.

Also on Thursday, Treasury sold $13 billion of inflation-indexed 10-year TIPs at a 0.548% high yield, an adjusted price of 99.536480, with a 1/2% coupon.

The bid-to-cover ratio was 2.69. Tenders at the market-clearing yield were allotted 91.10%.

Among competitive tenders, the median yield was 0.508% and the low yield 0.470%, Treasury said.

Tax-exempt money market funds saw inflows
Tax-exempt money market funds experienced inflows of $719.3 million, bringing total net assets to $136.12 billion in the week ended Jan. 15, according to The Money Fund Report, a service of iMoneyNet.com.

This followed an inflow of $4.34 billion to $135.40 billion in the previous week.

The average, seven-day simple yield for the 198 weekly reporting tax-exempt funds fell to 0.86% from 0.96% the previous week.

The total net assets of the 832 weekly reporting taxable money funds decreased $29.01 billion to $2.639 trillion in the week ended Jan. 22, after an outflow of $7.07 billion to $2.668 trillion the week before.

The average, seven-day simple yield for the taxable money funds increased to 0.94% from 0.93% from the prior week.

Overall, the combined total net assets of the 1,030 weekly reporting money funds decreased $28.29 billion to $2.775 trillion in the week ended Jan. 22, after outflows of $2.73 billion to $2.803 trillion in the prior week.

Will Imbrie-Moore contributed to this report.

Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation. Click here for a brief tour of the Workstation, or contact Vanessa Kim at 212-803-8474 for more information.

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Chip Barnett

Chip Barnett

Chip Barnett is a journalist with more than 40 years of experience. Barnett is currently Senior Market Reporter for The Bond Buyer.
Aaron Weitzman

Aaron Weitzman

Aaron Weitzman is a markets reporter for The Bond Buyer, focusing on the sell side of the municipal bond market.