The municipal bond market on Friday was looking ahead to next week after finishing off the last of this week's big deals on Thursday.
Primary Market
On Thursday, Shelby County, Tenn., sold $172.665 million of general obligation refunding bonds in a competitive sale. Wells Fargo Securities won the bonds with a true interest cost of 1.5%. The bonds were priced to yield from 0.15% with a 2% coupon in 2015 to 2.11% with a 5% coupon in 2027. The deal is rated Aa2 by Moody's Investors Service and AA-plus by both Standard & Poor's and Fitch Ratings.
Also on Thursday, The Florida Department of Management Services sold $103.175 million of refunding certificates of participation. Citigroup Global Markets won the COPs with a TIC of 1.8391% and priced them to yield from 0.10% with a 5% coupon in 2015 to 2.29% with a 5% coupon in 2025. The issue is rated Aa2 by Moody's and AA-plus by S&P and Fitch.
Secondary Market
Treasury prices were higher on Friday after the release of the December employment report, with the two-year note yield slipping to 0.60% from 0.61% on Thursday. The 10-year yield fell to 2.00% from 2.02%, while the 30-year yield decreased to 2.58% from 2.60%.
December nonfarm payrolls gained 252,000 while the unemployment rate improved further to 5.6%.
On Thursday, prices of top-quality municipal bonds were lower. The yield on the benchmark 10-year general obligation was up two basis points to 1.91% from 1.89% on Wednesday, while the yield on 30-year GOs was up four basis points to 2.71% from 2.67%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was at 94.6% on Thursday compared to 96.4% on Wednesday, while the 30-year muni to Treasury ratio was at 104.4% versus 106.0%.
MSRB Reports Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,903 trades on Thursday on volume of $11.939 billion.
Most active on Thursday, based on the number of trades, was the New Jersey Transportation Trust Fund Authority transportation program bonds, Series AA 4 1/4s of 2044, which traded 185 times with an average price of 102.542 and an average yield of 3.925%.
Tax-Exempt Money Market Funds See Inflows
Tax-exempt money market fund had an inflow of $4.371 billion, bringing their total net assets to $264.656 billion in the week ended Jan. 6, according to The Money Fund Report, a service of iMoneyNet.com. The funds saw $709.6 million of inflows in the prior week.
The average seven-day yield for the 396 weekly reporting tax-exempt money funds held steady at 0.1%, while the average maturity decreased by two days to 36 days compared to the previous week.
