There was a lot happening in the new issue market during the week as about $7.36 billion of new supply hit the market. Grabbing the most attention were several deals from down South, including the state of Georgia, the County of Miami-Dade and the city of Atlanta.
The Peach State sold over $1 billion of general obligation bonds in the competitive arena.
Georgia's offerings consisted of five separate sales and were won by three different bidders. The bonds were rated triple-A by Moody's Investors Service, Standard & Poor's and Fitch Ratings.
Citi won the $279.15 million of Series 2015C GO refunding bonds with a true interest cost of 1.02%. Citi also won the $265.10 million of Series 2015B taxable GOs, Tranche 1, with a TIC of 2.48%. And Citi took the $288.03 million of Series 2015A GOs, Tranche 2, with a TIC of 3.38%. Goldman, Sachs won the $275.32 million of Series 2015A general obligation bonds, Tranche 1, with a TIC of 1.8189%. Wells Fargo Securities won the $182.73 million of Series 2015B taxable GOs, Tranche 2, with a TIC of 4.11%.
Bank of America Merrill Lynch won the city of Atlanta's $252 million of Series 2015 GO public improvement bonds with a TIC of 3.37%. The bonds were rated Aa2 by Moody's, AA by S&P and AA-plus by Fitch.
The Dormitory Authority of the State of New York sold over $1 billion of Personal Income Tax bonds, or PITS. The PITs were rated Aa1 by Moody's and triple-A by Standard & Poor's.
The DASNY sale consisted of five separate offerings. Morgan Stanley won the $415.87 million of Series 2015B tax-exempt Group C state PIT revenue bonds with a TIC of 4.29%. RBC Capital Markets won the $393.32 million of Series 2015B tax-exempt Group B state PIT revenue bonds with a TIC of 3.74%. JPMorgan won the $241.36 million of Series 2015B tax-exempt Group A state PIT revenue bonds with a TIC of 2.15%. JPMorgan also won the $97.62 million of Series 2015D taxable state PIT revenue bonds with a TIC of 2.79%. Citi won the $29.92 million of Series 2015C tax-exempt state PIT revenue bonds with a TIC of 3.68%.
In the negotiated sector, RBC Capital Markets priced Miami-Dade County's $538 million of aviation bonds for institutions after a one-day retail order period. The deal was rated A by S&P and Fitch and AA-minus by Kroll.
"It went well, we got to the market and did really well in the retail period and that carried over to the institutions," said Frank Hinton, Miami-Dade County's Director of the Division of Bond Administration.
Secondary Market
Prices of top-rated municipal bonds closed higher on Friday.
The yield on the 10-year benchmark muni general obligation finished down one basis point to 2.33% from 2.34% on Thursday, while the yield on the 30-year GO fell two basis points to 3.30% from 3.32%, according to the final read of Municipal Market Data's triple-A scale.
Among securities tracked by Market, the Puerto Rico commonwealth 8s of 2035 were yielding 10.36% on Friday compared to 10.32% on Thursday, 10.15% on Wednesday and 10.01% on Tuesday.
Treasury prices were mostly higher on Friday with the yield on the two-year Treasury note unchanged at 0.72% from Thursday, while the 10-year yield decreased to 2.38% from 2.39% and the 30-year yield was declined to 3.10% from 3.11%.
The 10-year muni to Treasury ratio was calculated on Friday at 97.9% versus 98.2% on Thursday, while the 30-year muni to Treasury ratio stood at 109.1% compared to 106.9%, according to MMD.
Municipal Bond Funds See Outflows for 6th Straight Week
For the sixth week in a row, municipal bond funds reported outflows, bringing to nine out of 24 weeks this year the funds have suffered cash withdrawals.
The weekly reporting funds saw $411.755 million of outflows in the week ended June 10, after experiencing outflows of $380.735 million in the previous week, according to the latest Lipper data.
The four-week moving average remained negative at $272.198 million after being in the red at $177.359 million in the previous week. The moving average has been negative for three weeks in a row. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.
Long-term muni bond funds also experienced outflows, losing $264.597 million in the latest week, after seeing outflows of $73.759 million in the previous week. Intermediate-term funds recorded outflows of $48.402 million after seeing outflows of $179.954 million in the prior week.
High-yield muni funds saw an outflow of $241.843 million in the latest reporting week, after seeing an inflow of $15.878 million the previous week.
Exchange traded funds saw outflows of $2.522 million, after experiencing outflows of $5.572 million in the previous week.
The Week's Most Actively Quoted Issues
Puerto Rico and Ohio issues were among the most actively quoted in the week ended June 12, according to data released by Markit.
On the bid side, the Puerto Rico Electric Power Authority (PREPA) revenue bond 5 1/4s of 2040 were quoted by nine unique dealers. On the ask side, the Franklin County, Ohio, hospital revenue bonds 4 1/8s of 2045 were quoted by 14 dealers. And among two-sided quotes, the Puerto Rico commonwealth 8s of 2035 were quoted by 10 dealers, Markit said.
The Week's Most Actively Traded Issues
Some of the most actively traded issues in the week ended June 12 were in New York, Massachusetts and Puerto Rico names, according to Markit.
In the revenue bond sector, the DASNY non-state supported debt 4s of 2035 were traded 101 times. In the GO bond sector, the Massachusetts 4s of 2045 were traded 62 times. And in the taxable bond sector, the Puerto Rico Employees Retirement System 6.15s of 2038 were traded 20 times, according to Markit.
