The municipal bond market on Monday was poised to accept this week's new issuance, the first substantial supply in over two weeks. About $3.24 billion of new volume is set to hit the screens this week, consisting of about $2.185 billion of negotiated deals and $1.055 billion of competitive sales.
Prices of high-quality municipal bonds were up at midday, traders said.
Primary Market
Barclays Capital is expected to price the Dormitory Authority of the State of New York's $1 billion general purpose state personal income tax revenue bonds for retail investors on Tuesday, followed by the institutional pricing on Wednesday. The DASNY bonds have been rated AA-plus by Fitch Ratings.
Citigroup is slated to price the state of Oregon's Department of Administrative Services' $412 million lottery revenue bond deal. The offering is expected to price on Thursday. The deal is rated Aa2 by Moody's Investors Service and AAA by Standard & Poor's.
Citi is also expected to price the Broward County, Fla., School Board's $273 million certificates of participation on Wednesday. The COPs are rated A1 by Moody's, A by S&P and A-plus by Fitch.
Miami-Dade County, Fla., has three separate sales of general obligation bonds totaling $371.93 million going up for bid on Tuesday. All three competitive deals are rated Aa2 by Moody's and AA by S&P.
Shelby County, Tenn., will sell a $172.6 million general obligation refunding bond issue in a competitive sale on Thursday. This deal is rated Aa1 by Moody's and AA-plus by both S&P and Fitch.
Secondary Market
Top quality municipal bond prices were higher at mid-session.
The yield on the benchmark 10-year general obligation dropped one to three basis points from 2.01% on Friday, while the yield on 30-year GOs declined three to five basis points from 2.83%, according to a read of MMD's triple-A scale.
Treasury prices were higher on Monday, with the two-year note yield down to 0.66% from 0.67% on Friday. The 10-year yield fell to 2.05% from 2.12%, while the 30-year yield declined to 2.62% from 2.70% on Friday.
On Friday, the 10-year muni to Treasury ratio was at 94.8%, while the 30-year muni to Treasury ratio was at 101.1%.
MSRB Reports Previous Session's Activity
The Municipal Securities Rulemaking Board reported 18,034 trades on Friday on volume of $2.042 billion.
Most active on Friday, 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 114 times with an average price of 100.808 and an average yield of 4.14%.
Money Market Funds
Tax-exempt money market funds increased $709.6 million, bringing total net assets to $260.29 billion in the week ended Dec. 30, according to The Money Fund Report, a service of iMoneyNet.com. The funds saw $2.730 billion 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 one day to 38 days compared to the previous week.
The 994 weekly reporting taxable money market funds, meanwhile, reported inflows of $11.86 billion, bringing total assets to $2.494 trillion. The average, seven-day yield for the taxable money funds remained unchanged at 0.01%, while the average maturity declined two days to 43 days.
Overall, the combined total net assets of the 1,390 weekly reporting money funds grew $12.57 billion in the week ended Dec. 30 to $2.754 trillion, marking the 11th straight week of reported inflows, according to The Money Fund Report.
