The municipal bond market was taking a breather on Thursday from the heavy slate of deals that came to market on Wednesday.
Treasury bond prices were mixed in early trading after the release of weak data on retail sales and weekly jobless claims.
Primary Market
The Trinity Health Credit Group returned to the municipal bond market on Wednesday to sell its $894.75 million tax-exempt deal, a week after the offering was postponed due to unfavorable market conditions.
The deal was a composite issue, separated into three series issued by the Michigan Finance Authority, the Idaho Health Facilities Authority and Montgomery County, Md. Bank of America Merrill Lynch priced the issue, which was rated Aa3 by Moody's Investors Service, AA-minus by Standard & Poor's and AA by Fitch Ratings.
Also pricing were the South Carolina Public Service Authority's $957.045 million sale for Santee Cooper and the Michigan Finance Authority's $192.56 million deal for the Detroit School District.
Additionally, Bank of America Merrill Lynch priced the Pennsylvania Higher Education Facilities Authority's $301.805 million of fix-rate revenue bonds for Thomas Jefferson University; Morgan Stanley priced the Pennsylvania Housing Agency's $118.8 million of single-family mortgage revenue bonds; J.P. Morgan priced the Washington State University's $151.84 million of general revenue and refunding bonds and JPMorgan priced two issues of bonds for Tacoma, Wash. -- $100.315 million sewer revenue and refunding bonds and $20.39 million solid waste revenue Green Bonds.
In the competitive arena, Citigroup Global Markets won the Maryland DOT's $280 million of consolidated transportation bonds with a true interest cost of 2.5635%.
Secondary Market
Treasury prices were mixed on Thursday after the release of weaker economic data. Retail sales fell 0.8% in January, larger than economists' predictions of a 0.5% drop. Initial claims for state unemployment benefits increased to 304,000; analysts had expected claims to rise to 285,000.
The two-year Treasury note's yield slipped to 0.65% from 0.66% on Thursday, while the 10-year yield was unchanged at 1.99%, and the 30-year yield rose to 2.58% from 2.57%.
Prices of top-rated munis ended lower on Wednesday. The yield on the 10-year benchmark muni general obligation rose two basis points to 2.04% from 2.02% on Tuesday, while the yield on 30-year GOs rose two basis points to 2.86% from 2.84%, according to the final read of Municipal Market Data's triple-A scale.
Since the start of the month, the yield on the muni 10-year benchmark general obligation has risen 30 basis points, while yield on the 30-year GO is 36 basis points higher, according to MMD.
On Wednesday, the 10-year muni to Treasury ratio was calculated at 102.6% from 101.6% on Tuesday, while the 30-year muni to Treasury ratio stood at 111.7% compared to 110.5%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $1.890 billion to $7.827 billion on Thursday. The total is comprised of $1.767 billion competitive sales and $6.060 billion of negotiated deals.
MSRB Reports Previous Session's Activity
The Municipal Securities Rulemaking Board reported 40,531 trades on Wednesday on volume of $9.600 billion.
Most active on Wednesday, based on the number of trades, was the State of New York Mortgage Agency 2015 Series 190 homeowner mortgage revenue bonds 3.45s of 2030, which traded 342 times with an average price of 99.813, an average yield of 3.463%.
