Top quality municipal bonds finished unchanged on Thursday, traders said, as deals from Illinois and Michigan's Great Lakes Water Authority swept into the market.
Primary Market
Bank of America Merrill Lynch priced the state of Illinois' $1.32 billion of Series of October 2016 general obligation refunding bonds.
The issue was priced to yield from 2.34% with a 5% coupon in 2018 to 4.09% with a 4% coupon in 2032.
The deal is rated Baa2 by Moody's Investors Service, BBB by S&P Global Ratings and BBB-plus by Fitch Ratings, with the exception of the 2030 through 2032 maturities totaling $160.95 million, which are insured by Assured Guaranty Municipal.
Citigroup priced the Great Lakes Water Authority, Mich.'s $1.33 billion deal, consisting of $909.83 million of Series 2016 water supply system senior lien and second lien revenue senior lien and second lien revenue refunding bonds and $417.19 million of sewage disposal system revenue refunding senior and second lien bonds.
The $87.66 million of Series 2016A water supply system revenue senior lien bonds were priced as 5s to yield 3.34% in a 2046 bullet maturity. The $163.2 million of Series 2016B water supply system revenue second lien bonds were priced as 5s to yield 3.49% in a 2046 bullet maturity.
The $449.16 million of Series 2016C water supply system revenue refunding senior lien bonds were priced to yield from 1.82% with a 5% coupon in 2022 to 3.16% with a 5% coupon and 3.06% with a 5.25% coupon in a split 2035 maturity. The $209.82 million of Series 2016D water supply system revenue refunding second lien bonds were priced to yield from 2.26% with a 5% coupon in 2024 to 3.34% with a 5% coupon in 2036.
The $124.69 million of Series 2016B sewage disposal system revenue refunding senior lien bonds were priced to yield from 2.11% with a 5% coupon in 2024 to 3.12% with a 5% coupon in 2034. The $292.5 million of Series 2016C sewage disposal system revenue refunding second lien bonds were priced to yield 2.66% with a 5% coupon in 2027 and to yield from 3.02% with a 5% coupon in 2030 to 3.34% with a 5% coupon in 2036.
Moody's rates the senior liens A3 and the second liens Baa1; S&P rates the senior liens A-minus and the second liens BBB-plus; and Fitch rates the senior liens A and the second liens A-minus.
Raymond James & Associates priced the Cypress-Fairbanks Independent School District, Texas' $446.24 million of unlimited tax school building and refunding bonds.
The issue was priced to yield from 0.93% with a 4% coupon in 2018 to 3.03% with a 4% coupon in 2041. The deal is backed by the Permanent School Fund guarantee program and rated triple-A by Moody's and S&P.
Morgan Stanley priced the California Department of Water Resources' $420.46 million of Series AW water system revenue bonds for the Central Valley water project.
The issue was priced to yield from 0.89% with a 3% coupon in 2018 to 2.80% with a 4% coupon and 2.52% with a 5% coupon in a split 2035 maturity. The deal is rated Aa1 by Moody's and triple-A by S&P.
Goldman Sachs priced the Long Island Power Authority, N.Y.'s $408.11 million of Series 2016B electric system general revenue bonds.
The issue was priced to yield from 1.01% with a 5% coupon in 2017 to 3.01% with a 5% coupon in 2036; a 2041 maturity was priced as 5s to yield 3.11% and a 2046 maturity was priced as 5s to yield 3.16%. The deal is rated A3 by Moody's and A-minus by S&P and Fitch.
Loop Capital priced the Dormitory Authority of the State of New York's $144.89 million of Series 2016A revenue refunding bonds for the NYS Department of Health.
The DASNY bonds were priced to yield from 1.02% with a 5% coupon in 2018 to 3.20% with a 3.125% coupon in 2036. A 2017 maturity was offered as a sealed bid. The bonds are rated AA by S&P and Fitch.
Morgan Stanley priced Indianapolis' $223.53 million of Series 2016B water system first lien refunding revenue bonds.
The issue was priced to yield from 1.08% with a 4% coupon in 2018 to 3.39% with a 4% coupon and 3.09% with a 5% coupon in a split 2038 maturity. The deal is rated AA-minus by S&P and A by Fitch.
Since 2007, the Indianapolis has issued just over $1 billion of bonds with the most issuance occurring in 2008 when it sold $276 million of debt; the city did not issue any bonds in 2015.
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 unchanged from 2.53%, according to the final read of Municipal Market Data's triple-A scale.
U.S. Treasuries were stronger on Thursday. The yield on the two-year Treasury declined to 0.83% from 0.87% on Wednesday, the 10-year Treasury yield dropped to 1.74% from 1.77% and the yield on the 30-year Treasury bond decreased to 2.47% from 2.50%.
Tax-Exempt Money Market Fund Outflows
Tax-exempt money market funds experienced outflows of $1.96 billion, bringing total net assets to $127.35 billion in the week ended Oct. 10, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $5.09 billion to $129.32 billion in the previous week.
The average, seven-day simple yield for the 243 weekly reporting tax-exempt funds rose to 0.34% from 0.32% in the previous week.
The total net assets of the 865 weekly reporting taxable money funds decreased $16.87 billion to $2.477 trillion in the week ended Oct. 11, after an outflow of $30.11 billion to $2.494 trillion the prior before.
The average, seven-day simple yield for the taxable money funds remained at 0.13%.
Overall, the combined total net assets of the 1,108 weekly reporting money funds fell $18.83 billion to $2.604 trillion in the period ended Oct. 11, which followed an outflow of $35.19 billion to $2.623 trillion.
