Municipal bond traders will go back to school on Thursday as two big education issues will dominate an otherwise lackluster slate. Meanwhile, top-quality munis were stronger in early activity
Secondary Market
The yield on the 10-year benchmark muni general obligation was as much as one basis point lower from 1.41% on Wednesday, while the yield on the 30-year muni fell as much as one basis point from 2.13%, according to an early read of Municipal Market Data's triple-A scale.
U.S. Treasuries were also stronger on Thursday. The yield on the two-year Treasury declined to 0.72% from 0.73% on Wednesday, the 10-year Treasury yield dipped to 1.55% from 1.56% and the yield on the 30-year Treasury bond decreased to 2.26% from 2.27%.
On Wednesday, the 10-year muni to Treasury ratio was calculated at 90.7% compared to 89.5% on Tuesday, while the 30-year muni to Treasury ratio stood at 94.0% versus 93.2%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 37,822 trades on Wednesday on volume of $15.75 billion.
Primary Market
In the competitive arena, the Los Angeles Unified School District, Calif., is selling $455.44 million of Series 2016B general obligation refunding, dedicated unlimited ad valorem property tax bonds.
The deal is rated Aa2 by Moody's Investors Service and triple-A by Fitch Ratings.
The last time the LAUSD competitively sold comparable bonds was on May 6, 2015, when JPMorgan Securities won $326.05 million of Series 2015A GO refunding bonds with a true interest cost of 1.87%.
Since 2006, the LAUSD has sold $14.86 billion of securities, with the largest issuance coming in 2009 when it offered $2.92 billion. The school district has issued over $2 billion dollars four times since 2006, but has also issued less than $500 million five times over the same span.
In the negotiated sector, HilltopSecurities is expected to price the Grapevine-Colleyville Independent School District, Texas $160.46 million of Series 2016 unlimited tax school building bonds. The deal, which is backed by the Permanent School Fund guarantee program, is rated triple-A by Moody's and S&P Global Ratings.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $1.61 billion to $11.55 billion on Thursday. The total is comprised of $4.91 billion of competitive sales and $6.64 billion of negotiated deals.
Tax-Exempt Money Market Fund Outflows
Tax-exempt money market funds experienced outflows of $8.74 billion, bringing total net assets to $170.97 billion in the week ended Aug. 15, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $4.45 billion to $179.71 billion in the previous week.
The average, seven-day simple yield for the 270 weekly reporting tax-exempt funds rose to 0.09% from 0.08% in the previous week.
The total net assets of the 884 weekly reporting taxable money funds decreased $5.35 billion to $2.523 trillion in the week ended Aug. 16, after an outflow of $6.09 billion to $2.528 trillion the prior before.
The average, seven-day simple yield for the taxable money funds remained at 0.11% from the week before.
Overall, the combined total net assets of the 1,154 weekly reporting money funds fell $14.09 billion to $2.694 trillion in the period ended Aug. 16, which followed an outflow of $10.54 billion to $2.708 trillion.
