The municipal bond market was winding down the busiest week of the year as traders waited to see the size and shape of new week's calendar.
Secondary Market
U.S. Treasuries were weaker in early trading on Friday. The yield on the two-year Treasury rose to 0.89% from 0.88% on Thursday, while the 10-year Treasury yield gained to 1.86% from 1.84% and the yield on the 30-year Treasury bond increased to 2.65% from 2.63%.
The yield on the 10-year benchmark muni general obligation on Thursday rose two basis points to 1.62% from 1.60% on Wednesday while the 30-year muni yield was flat from 2.45%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 87.9% on Thursday compared to 85.1% on Wednesday, while the 30-year muni to Treasury ratio stood at 93.0% versus 91.3%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 38,285 trades on Thursday on volume of $13.92 billion.
The Week's Most Actively Traded Issues
Some of the most actively traded issues by type in the week ended May 20 were from Puerto Rico and New York issuers, according to data released by
In the GO bond sector, the Puerto Rico commonwealth 8s of 2035 traded 44 times. In the revenue bond sector, the New York Transportation LaGuardia 5s of 2046 traded 139 times. And in the taxable bond sector, the New York Transportation LaGuardia 3.673s of 2030 traded 30 times, Markit said.
The Week's Most Actively Quoted Issues
California issues were among the most actively quoted names in the week ended May 20, according to Markit.
On the bid side, the California taxable 7.55s of 2039 were quoted by 12 unique dealers. On the ask side, the California taxable 7.6s of 2040 were quoted by 19 unique dealers. And among two-sided quotes, the California taxable 7.6s of 2040 were quoted by 16 dealers.
Primary Market
Traders saw the biggest slate of new issues come to market this week, led by deals from issuers in New York and California.
Citigroup priced the biggest deal of the week – the New York Transportation Development Corp.'s $2.26 billion of Series 2016A tax-exempt bonds and an additional $150 million of Series 2016B taxables for the LaGuardia Special Facilities Terminal B Redevelopment Project.
Traders said the deal was well received and massively oversubscribed.
The tax-exempts, which are subject to the alternative minimum tax, are rated Baa3 by Moody's Investors Service and triple-B by Fitch Ratings except for the 2035-2037 and 2051 maturities which are insured by Assured Guaranty Municipal and rated A2 by Moody's, AA by S&P Global Ratings, and AA-plus by Kroll Bond Rating Agency. The $150 million of Series 2016B taxables are rated Baa3 by Moody's and triple-B by Fitch.
Bank of America Merrill Lynch priced New York City's $800.45 million of Fiscal 2016 Series E and F general obligation bonds after holding a tow day retail order period. The deal consisted of $775.46 million of Series E GOs and $24.99 million of Series F GOs.
The city said it received about $240 million of retail orders for the bonds during the two-day retail order period.
"This week's sale of $800 million in general obligation bonds achieved both low absolute rates and tight spreads to the MMD index. We're proud of these results, and the fact that these bonds will deliver substantial savings to New York City taxpayers over the next four years," said New York City Comptroller Scott M. Stringer.
Goldman Sachs priced the Los Angeles Municipal Improvement Corp.'s $810.51 million of Series 2016A capital equipment and Series 2016B real property lease revenue refunding bonds. The deal is rated A-plus by S&P and Fitch and AA-minus by Kroll Bond Rating Agency.
BAML priced the New York Metropolitan Transportation Authority's $588.24 million of Series 2016B dedicated tax green fund and refunding climate certified bonds. The deal is rated AA by both S&P and Fitch.
Roosevelt & Cross priced the Dormitory Authority of the State of New York's $206.48 million of Series E, F, G, H, I and J revenue bonds under the school districts revenue bond financing program.
Morgan Stanley priced the Illinois Finance Authority and the Iowa Finance Authority's $222.89 million of health facilities revenue bonds for UnityPoint Health. The deal is rated Aa3 by Moody's and AA-minus by Fitch.
BAML priced the Municipal Electric Authority of Georgia's $355.55 million bond offering. The issue is rated A2 by Moody's, A by S&P and A-plus by Fitch.
Piper Jaffray priced the Illinois State Tollway Highway Authority's $300 million Series 2016B toll highway senior revenue bonds. The deal is rated Aa3 by Moody's and AA-minus by S&P and Fitch.
Proceeds from the sale will partially fund the authority's 15-year $12 billion capital program, Move Illinois: The Illinois Tollway Driving the Future.
"We are taking advantage of the excellent interest rates available to the Tollway because of our solid credit and coverage ratios to keep pushing ahead with our Move Illinois capital program," Illinois Tollway Executive Director Greg Bedalov said in a press release. "This funding will help keep the program financially strong as we expand and improve our roadways."
The sale was the first of two new-money bond issues totaling $600 million set to be priced this year. A portion of the program is expected to be financed by about $4.7 billion of revenue bonds and the remainder is expected to be financed by pay-as-you-go revenues.
Raymond James priced Henrico County, Va.'s $125.33 million of Series 2016 water and sewer revenue and refunding bonds. The deal is rated Aa1 by Moody's and triple-A by S&P and Fitch.
Piper Jaffray priced the Metropolitan Government of Nashville and Davidson County, Tenn.'s $346.93 million of Series 2016 GO refunding bonds. The deal is rated Aa2 by Moody's and AA by S&P.
In the competitive arena, the Virginia College Building Authority sold $451.22 million of bonds in two separate sales, both for the 21st Century College and Equipment Program. BAML won the $410.98 million of various educational facilities revenue and revenue refunding bonds with a true interest cost of 2.51%. Raymond James won the $40.24 million of Series 2016C taxable educational facilities revenue bonds with a TIC of 2.02%. Both deals are rated Aa1 by Moody's and AA-plus by S&P and Fitch.
New Mexico sold $303.78 million of severance tax bonds in two separate sales. BAML won the $261 million of Series 2016A severance tax bonds and Series 2016B refunding severance tax bonds with a true interest cost of 1.38%. Robert W. Baird won the $42.78 million of Series 2016C taxable severance tax bonds with a TIC of 1.27%. The bonds are rated Aa2 by Moody's and AA-minus by S&P.
The Clark County School District, Nev., sold $315.94 million of bonds in three separate sales. JPMorgan Securities won the $188.84 million of Series 2016A limited tax general obligation refunding bonds with a TIC of 1.73%. Citigroup won the $92.61 million of Series 2016B limited tax GO refunding bonds additionally secured by pledged revenues with a TIC of 1.93%. Citi also won the $34.50 million of Series 2016C limited tax GO mid-term bonds with a TIC of 1.62%. All three deals are rated A1 by Moody's and AA-minus by S&P.
The Washington Suburban Sanitary District, Md., competitively sold $183.63 million of bonds in two separate sales. Wells Fargo Securities won the $145 million of consolidated public improvement bonds of 2016 with a TIC of 2.81%. BAML won the $38.63 million of consolidated public improvement refunding bonds of 2016 with a TIC of 1.08%. Both deals are rated triple-A by Moody's, S&P and Fitch.
Loudoun County, Va., competitively sold $144.99 million of Series 2016A GO public improvement and refunding bonds. JPMorgan won the deal with a TIC of 1.86%. The deal is rated triple-A by Moody's, S&P and Fitch.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $2.17 billion to $13.78 billion on Friday. The total is comprised of $5.72 billion of competitive sales and $8.06 billion of negotiated deals.
Muni Bond Funds See Inflows for 33rd Week in a Row
For the 33rd straight week, municipal bond funds reported inflows, according to Lipper data released Thursday.
Weekly reporting funds saw $1.245 billion of inflows in the week ended May 18, after inflows of $1.212 billion in the previous week, Lipper said.
The four-week moving average remained positive at $1.085 billion after being in the green at $912.861 million in the previous week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.
Long-term muni bond funds also experienced inflows, gaining $738.463 million in the latest week after inflows of $805.057 million in the previous week. Intermediate-term funds had inflows of $388.056 million after inflows of $237.402 million in the prior week.
National funds had inflows of $1.209 billion on top of inflows of $1.062 billion in the previous week. High-yield muni funds reported inflows of $372.212 million in the latest reporting week, after inflows of $309.525 million the previous week.
Exchange traded funds saw inflows of $200.238 million, after inflows of $137.910 million in the previous week.
