Buyers of municipal bonds are eyeing next week’s big transportation deal coming out of New York as they get set to see another healthy dose of supply.
Ipreo estimates weekly volume at $7.78 billion, up from a revised total of $6.94 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 $5.36 billion of negotiated deals and $2.42 billion of competitive sales.
Citigroup is expected to price the New York Transportation Development Corp.’s $1.4 billion of special facilities revenue bonds on Tuesday.
The bonds are the next step in the rejuvenation of LaGuardia Airport, which some politicians have compared to a Third World country. The issue is redevelopment financing to fix Delta Airlines’ Terminals C and D at LaGuardia.
The offering is subject to the alternative minimum tax and is rated Baa3 by Moody’s Investors Service and BBB-minus by Fitch Ratings.
Also on next week’s calendar is a big issue from the Texas Water Development Board.
JPMorgan Securities is set to price the Board’s $803.68 million of Series 2018 Master Trust State Water Implementation Revenue Fund for Texas revenue bonds on Tuesday. The deal is rated AAA by S&P Global Ratings and Fitch.
Ramirez & Co. is expected to price the Port Authority of New York and New Jersey’s $412 million of 209th Series consolidated bonds on Wednesday.
In the competitive arena, Massachusetts is selling $500 million of general obligation bonds in two sales on Tuesday. The deals consist of $250 million of Series C consolidated loan of 2018 GOs and $250 million of Series D consolidated loan of 2018 GOs. The deals are rated Aa1 by Moody’s, AA, by S&P and AA-plus by Fitch.
On Wednesday, Illinois will sell $500 million of GOs in two sales, consisting of $450 million of Series of May 2018A GOs and $50 million of Series of May 2018B GOs. The deals are rated Baa3 by Moody’s, BBB-minus by S&P and BBB by Fitch.
Municipal bonds were mixed on Friday, according to a midday read of the MBIS benchmark scale. Benchmark muni yields rose less than a basis point in the two- to three-year and 10- to 30-year maturities and fell in one-year and four- to nine-year maturities.
Yields calculated on MBIS’ AAA scale were also mixed as yields rose less than a basis point in the 10- to 30-year maturities and fell less than a basis point in one- to nine-year maturities.
Treasury bonds were weaker as the Dow Jones Industrial Average, S&P 500 Index and Nasdaq Composite Index all moved lower.
Bond Buyer 30-day visible supply at $10.63B
The Bond Buyer's 30-day visible supply calendar increased $1.71 billion to $10.63 billion on Friday. The total is comprised of $4.93 billion of competitive sales and $5.70 billion of negotiated deals.
Week's actively traded issues
Some of the most actively traded bonds by type in the week ended April 20 were from Connecticut, Pennsylvania and California issuers, according to Markit.
In the GO bond sector, the University of Connecticut 4s of 2038 traded 37 times. In the revenue bond sector, the Montgomery County Higher Education and Health Authority, Pa., 4s of 2049 traded 57 times. And in the taxable bond sector, the California 4.6s of 2038 traded 117 times.
Week's actively quoted issues
Chicago, New York and Puerto Rico names were among the most actively quoted bonds in the week ended April 20, according to Markit.
On the bid side, the Chicago Board of Education GO 5s of 2041 were quoted by 32 unique dealers. On the ask side, the New York City GO 3.375s of 2038 were quoted by 101 dealers. And among two-sided quotes, the Puerto Rico Commonwealth GO 8s of 2035 were quoted by 24 unique dealers.
Previous session's activity
The Municipal Securities Rulemaking Board reported 45,504 trades on Thursday on volume of $15.22 billion.
California, New York and Texas were the states with the most trades, with the Golden State taking 15.209% of the market, the Empire State taking 12.004% and the Lone Star State taking 9.521%
Lipper: Muni bond funds saw outflows
Investors in municipal bond funds continued to pull cash out of the funds, according to Lipper data released on Thursday.
The weekly reporters saw $515.154 million of outflows in the week ended April 18, after outflows of $244.735 million in the previous week.
Exchange traded funds reported outflows of $60.766 million, after inflows of $126.962 million in the previous week. Ex-ETFs, muni funds saw $454.389 million of outflows, after outflows of $371.967 million in the previous week.
The four-week moving average remained negative at -$242.552 million, after being in the red at -$2.401 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 outflows of $83.861 million in the latest week after inflows of $78.278 million in the previous week. Intermediate-term funds had inflows of $16.059 million after outflows of $10.979 million in the prior week.
National funds had outflows of $421.893 million after outflows of $184.593 million in the previous week. High-yield muni funds reported inflows of $45.728 million in the latest week, after inflows of $172.574 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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Corrected April 20, 2018 at 2:39PM: Fixes size of Delta deal.