The municipal bond market is looking ahead to the upcoming week, where a chunky new issue slate is being prepared. Volume for next week is estimated at $8.807 billion, up from the revised $3.155 billion sold in this holiday-shortened week.
Traders will also be watching muni bond yields, which have been stabilizing at higher levels over the past week.
Primary Market
There are $7.044 billion of negotiated deals scheduled for next week.
Leading the supply calendar is the $1.25 billion deal from Atlanta, Ga. Loop Capital Markets is scheduled to price the water and wastewater revenue refunding bonds on Tuesday. The issue is rated Aa3 by Moody's Investors Service, AA-minus by Standard & Poor's and A-plus by Fitch Ratings.
Bonds slated for competitive sale are estimated at $1.763 billion.
Two separate sales from the Clark County School District, Nev., totaling $398.405 million are scheduled for competitive sale on Tuesday. The district will sell $266.640 million Series A limited tax general obligation refunding bonds and $131.765 million Series B limited tax GO refunding bonds. The bonds are rated A1 by Moody's and AA-minus by S&P.
The state of Nevada will also be in the competitive arena, putting up 3 separate issues for bidding on Wednesday. The Silver State will sell $196.24 million Series B limited tax GO capital improvement and cultural affairs refunding bonds, $74.4 million Series A limited tax GO university system revenue supported projects bonds, and $20.805 million Series C limited tax GO natural resources refunding bonds. The bonds are rated Aa2 by Moody's, AA by S&P and AA-plus by Fitch.
On Thursday, Citigroup Global Markets priced the New York City Municipal Water Finance Authority's $530 million of water and sewer second general resolution revenue bonds. The deal went well, according to traders. The size of the issue was raised several times from its originally expected amount of $475 million. The bonds were rated Aa2 by Moody's and AA-plus by S&P and Fitch.
Secondary Market
Treasury prices moved higher on Friday. The yield on the two-year Treasury note slipped to 0.61% from 0.62% on Thursday while the 10-year yield fell to 2.08% from 2.11% and the 30-year yield dropped to 2.70% from 2.72%.
On Thursday, prices of top-quality municipal bonds closed flat. The yield on the 10-year benchmark muni general obligation was steady at 2.08%, while the yield on 30-year GO was unchanged at 2.88%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated at 98.3% on Thursday versus 100.6% on Wednesday, while the 30-year muni to Treasury ratio stood at 105.4% compared to 106.8%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar rose $3.862 billion to $12.695 billion on Friday. The total is comprised of $2.954 billion competitive sales and $9.742 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 42,917 trades on Thursday on volume of $9.716 billion. Most active, based on the number of trades, was the Fairfax County, Va., 2015 Series A public improvement bonds 3s of 2030, which traded 202 times at an average price of 99.739, with an average yield of 2.976%.
Tax-Exempt Bond Funds Report Inflows
Municipal bond funds which report weekly posted $59.047 million of inflows in the week ended Feb. 18, after experiencing inflows of $460.253 million in the week ended Feb. 11, according to the latest Lipper data.
The four-week moving average remained positive at $500.240 million in the latest week after being in the green at $678.287 million in the prior week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.
Muni bond funds so far have experienced inflows in each week of 2015, according to Lipper data. Inflows for the year total about $4.8 billion.
Long-term muni bond funds saw outflows of $118.225 million in the latest week, after experiencing inflows of $132.296 million in the previous week. The last time long-term funds saw outflows was on Dec. 31, 2014, when $267.407 million of cash was withdrawn.
High-yield muni funds recorded outflows of $219.980 million in the latest reporting week, after seeing outflows of $187.026 million in the prior week.
Exchange-traded funds had outflows of $33.536 million, after recording outflows of $109.534 million in the previous week.
In contrast, long-term municipal bond mutual funds saw $693 million of inflows in the week ended Feb. 11, according to the Investment Company Institute. ICI reported that inflows into long-term funds were $963 million in the week ended Feb. 4.
Tax-Exempt Money Market Funds See Outflows
Tax-exempt money market funds lost $1.25 billion, reducing total net assets to $259.16 billion in the week ended Feb. 16, according to The Money Fund Report, a service of iMoneyNet.com.
The average, seven-day simple yield for the 396 weekly reporting tax-exempt funds remained unchanged at 0.01%.
The total net assets of the 992 weekly reporting taxable money funds fell $21.95 billion to $2.432 trillion in the week ended Feb. 17 from $2.454 trillion in the prior week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the fourth consecutive week.
Overall, the combined total net assets of the 1,388 weekly reporting money funds declined by $23.20 billion to $2.691 trillion in the week ended Feb. 17, which was down from $2.714 trillion in the prior week. Christine Albano contributed to this report.
