Top-rated municipal bonds were stronger at midday, traders said, as North Carolina competitively sold more than $550 million of bonds.
The yield on the 10-year benchmark muni general obligation fell as much as two basis points from 1.93% on Wednesday, while the 30-year GO yield dropped one to three basis points from 2.73%, according to a read of Municipal Market Data's triple-A scale.
Treasuries were stronger on Thursday. The yield on the two-year Treasury dipped to 1.34% from 1.35% on Tuesday, the 10-year Treasury yield dropped to 2.24% from 2.26% and the yield on the 30-year Treasury bond decreased to 2.81% from 2.84%.
On Wednesday, the 10-year muni to Treasury ratio was calculated at 85.1%, compared with 85.8% on Tuesday, while the 30-year muni to Treasury ratio stood at 95.9% versus 96.1%, according to MMD.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 42,349 trades on Wednesday on volume of $13.19 billion.
In the competitive arena on Thursday, the state of North Carolina sold $554.03 million of Series 2017B limited obligation refunding bonds. Goldman Sachs won the bonds with a true interest cost of 2.23314%.
The issue was priced to yield from 0.99% with a 5% coupon in 2019 to 2.91% with a 3% coupon in 2031. A 2018 maturity was offered as a sealed bid.
The deal is rated Aa1 by Moody’s Investors Service and AA-plus by S&P Global Ratings and Fitch Ratings.
Since 2007, the Tar Heel state has issued almost $9 billion of debt, with the most issuance occurring in 2013 when it sold $1.57 billion. It sold the least amount of securities in 2012 when it issued about $180 million of bonds.
In the negotiated sector, Wells Fargo Securities is expected to price the California Educational Facilities Authority’s $123.06 million of Series 2017A taxable and Series 2017B tax-exempt revenue bonds for Santa Clara University.
The deal is rated Aa3 by Moody’s.
Morgan Stanley is expected to price the Massachusetts Housing Finance Agency’s $121.62 million of single-family housing revenue bonds, 2017 Series 187 not subject to the alternative minimum tax, 2017 Series 188 AMT bonds and 2017 Series 189 non-AMT bonds.
The deal is rated Aa1 by Moody’s and AA by S&P.
Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar decreased $979.4 million to $5.41 billion on Wednesday. The total is comprised of $2.23 billion of competitive sales and $3.18 billion of negotiated deals.
Tax-exempt money market funds see outflows
Tax-exempt money market funds experienced outflows of $200.5 million, bringing total net assets to $129.98 billion in the week ended July 17, according to The Money Fund Report, a service of iMoneyNet.com.
This outflow followed an inflow of $365.4 million to $130.18 billion in the previous week.
The average, seven-day simple yield for the 231 weekly reporting tax-exempt funds declined to 0.36% from 0.39% in the previous week.
The total net assets of the 852 weekly reporting taxable money funds increased $1.10 billion to $2.469 trillion in the week ended July 11, after an inflow of $1.88 billion to $2.468 trillion the week before.
The average, seven-day simple yield for the taxable money funds was unchanged at 0.63% from the prior week.
Overall, the combined total net assets of the 1,083 weekly reporting money funds increased $896.3 million to $2.599 trillion in the week ended July 11, after inflows of $2.24 billion to $2.598 trillion in the prior week.