Famine after feast: Municipal bond market looks at $4.8B new issue slate

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Municipal market participants will return to their desks next week only to see a return of this year’s average slate of bonds heading their way next only a week after getting a large helping of new issues.

Ipreo estimates volume for the upcoming week at $4.8 billion, down from a revised total of $7.6 billion in the prior week, according to updated data from Thomson Reuters. Average weekly volume in 2017 has been about $4.5 billion, off sharply from 2017’s average of over $6 billion a week.

Next week’s calendar is composed of $3.99 billion of negotiated deals and $813 million of competitive sales.
Bond Buyer 30-day visible supply at $8.27B
The Bond Buyer's 30-day visible supply calendar increased $1.20 billion to $8.27 billion on Friday. The total is comprised of $3.16 billion of competitive sales and $5.11 billion of negotiated deals.

Primary market
Next week, all eyes will be on the Big Apple, which dominates the calendar with over $1 billion of bond offerings. New York City is set to sell over $1 billion of bonds in a negotiated deal and two competitive taxable sales.

Citigroup is expected to price NYC’s $850 million of Fiscal 2018 Series F Subseries F-1 tax-exempt general obligation bonds on Wednesday after a two-day retail order period. The issue is expected to be structured as serials running from 2020 to 2046. NYC is also competitively selling $133.49 million of Fiscal 2018 Series F Subseries F-2 taxable) GOs and $116.51 million of Fiscal 2018 Series F Subseries F-3 taxable GOs on Wednesday.

Proceeds from the sale will be used to fund capital projects in the city with the exception of about $64 million which will be used to convert some outstanding floating-rate bonds into fixed-rate bonds.

The deals are rated Aa2 by Moody’s Investors Service and AA by S&P Global Ratings and Fitch Ratings.

Also on Wednesday, RBC Capital Markets is expected to rice Clark County, Nev.’s $648 million of limited tax general obligation stadium improvement bonds additionally secured by pledged revenues.

The deal is rated Aa1 by Moody’s and AA-plus by S&P.

Week's actively traded issues
Some of the most actively traded bonds by type in the week ended April 6 were from Kansas, New Jersey and Idaho issuers, according to Markit.

In the GO bond sector, Wichita, Kan., 1.75s of 2019 traded 36 times. In the revenue bond sector, the N.J. Tobacco Settlement Financing Corp. 5s of 2046 traded 154 times. And in the taxable bond sector, the Idaho Building Authority 4.124s of 2039 traded 13 times.

Week's actively quoted issues
Ohio, Texas and California names were among the most actively quoted bonds in the week ended April 6, according to Markit.

On the bid side, the Ohio Air Quality Development Authority revenue 5.7s of 2020 were quoted by 42 unique dealers. On the ask side, the Dallas Area Rapid Transit revenue 5s of 2046 were quoted by 113 dealers. And among two-sided quotes, the California taxable 7.55s of 2039 were quoted by 221 unique dealers.

Previous session's activity
The Municipal Securities Rulemaking Board reported 46,020 trades on Thursday on volume of $17.45 billion.

California, New York and Texas were the states with the most trades, with the Golden State taking 17.51% of the market, the Empire State taking 12.242% and the Lone Star State taking 7.582%.

Lipper: Muni bond funds saw outflows
Investors in municipal bond funds made an about face and pulled cash out of the funds in the latest week, according to Lipper data released on Thursday.

The weekly reporters saw $247.111 million of outflows in the week ended April 4, after inflows of $36.792 million in the previous week.
Exchange traded funds reported inflows of $25.411 million, after inflows of $36.581 million in the previous week. Ex-ETFs, muni funds saw $272.521 million of outflows, after inflows of $211,000 in the previous week.

The four-week moving average remained positive at $143.568 million, after being in the green at $307.034 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 had inflows of $85.357 million in the latest week after inflows of $131.694 million in the previous week. Intermediate-term funds had outflows of $29.999 million after inflows of $8.581 million in the prior week.

National funds had outflows of $166.142 million after inflows of $132.287 million in the previous week. High-yield muni funds reported inflows of $186.428 million in the latest week, after inflows of $153.850 million the previous week.

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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