After a busy week, and some clarity on tax reform, market participants are gearing up for the biggest volume week in some time, as issuers are getting advance refundings in while they still can.
Issuers started to rush to market over the past few weeks but next week, may be the pinnacle — as an estimated $17.4 billion deals are set for next week.
The MBIS municipal non-callable 5% GO benchmark scale was stronger in early trading on Friday morning.
The 10-year muni benchmark yield fell to 2.395% on Friday from the final read of 2.424% on Thursday, according to Municipal Bond Information Services. The MBIS 30-year benchmark muni yield decreased to 2.879% from 2.911%.
The MBIS benchmark index is updated hourly on the Bond Buyer Data Workstation.
Top-rated municipals were stronger again on Friday. The yield on the 10-year benchmark muni general obligation was between five and seven basis points lower from 2.15% on Thursday, while the 30-year GO yield was down between six and eight basis points from 2.79%, according to a read of MMD’s triple-A scale.
U.S. Treasuries were mostly stronger on Friday morning. The yield on the two-year Treasury nudged up to 1.79% from 1.78%, the 10-year Treasury yield dipped to 2.39% from 2.41% and the yield on the 30-year Treasury dropped to 2.79% from 2.83%.
On Thursday, the 10-year muni-to-Treasury ratio was calculated at 89.1% compared with 93.1% on Wednesday, while the 30-year muni-to-Treasury ratio stood at 98.6% versus 101.2%, according to MMD.
Lipper: Muni bond funds saw inflows
Investors in municipal bond funds continued to put cash into funds in the latest week, according to Lipper data released on Friday.
The weekly reporters saw $100.434 million of inflows in the week of Nov. 30, after inflows of $659.237 million in the previous week.
Exchange traded funds reported inflows of $61.076 million, after inflows of $83.606 million in the previous week. Ex-ETFs, muni funds saw $39.358 million of inflows, after inflows of $575.631 million in the previous week.
The four-week moving average was positive at $410.109 million, after being in the green at $221.250 million in the previous week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.
Long-term muni bond funds had inflows of $185.461 million in the latest week after inflows of $434.368 million in the previous week. Intermediate-term funds had inflows of $18.641 million after inflows of $112.175 million in the prior week.
National funds had inflows of $136.295 million after inflows of $642.814 million in the previous week.
High-yield muni funds reported inflows of $71.670 million in the latest week, after inflows of $177.142 million the previous week.
MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 49,652 trades on Thursday on volume of $16.524 billion.
Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar increased 4.515 billion to $21.47 billion on Friday. The total is comprised of $4.63 billion of competitive sales and $16.84 billion of negotiated deals.
The week’s primary market
The primary market was saturated with deals this week, as issuers rushed advance refunding deals to market to beat the clock on tax reform, as it becomes more and more of a reality, and advance refundings will become history.
Goldman Sachs priced the city of Houston’s $545.22 million of public improvement and refunding bonds on Thursday.
Morgan Stanley priced the Florida Development Finance Corp.’s $600 million of surface transportation facility revenue bonds for the Brightline Passenger Rail Project South Segment.
Wells Fargo priced the Regents of the University of Colorado’s $480.39 million of enterprise refunding revenue bonds.
Citi priced the Long Island Power Authority’s $350 million of electric system general revenue bonds.
Barclays priced the California Municipal Finance Authority’s $139.10 million of revenue bonds for Pomona College.
In the competitive sector, Washington State sold $499.09 million of various purpose general obligation refunding bonds. The deal was won by Morgan Stanley with a true interest cost of 3.03%.
Illinois sold total of $750 million of general obligation bonds in two competitive sales on Wednesday: $655 million and $95 million.
Bank of America Merrill Lynch won both sales, the larger one with a true interest cost of 4.33% and the smaller offering with a TIC of 3.71%.
Barclays priced the Board of Regents of the University of Texas A&M University’s $342.64 million of revenue financing system bonds.
RBC priced the New York State Environmental Facilities Corp.’s $337.015 million of Series 2017E state clean water and drinking water revolving funds revenue bonds for New York City Municipal Water Finance Authority projects.
JPMorgan priced Wisconsin Health and Educational Facilities Authority’s $301.77 million of revenue bonds for Children’s Hospital of Wisconsin.
Raymond James priced the city of Miami Beach, Fla.’s $115.180 million of water and sewer revenue refunding bonds.
Bank of America Merrill Lynch brought to market the Pennsylvania Higher Educational Facilities Authority’s $400 million of Series 2017A health system revenue bonds for the University of Pennsylvania Health System on Tuesday.
BAML also priced the Trustees of the University of Pennsylvania’s $200 million of taxable health system bonds for the Pennsylvania Health System.
RBC Capital Markets priced Wisconsin’s $368.595 million of Series 2017 2 transportation revenue refunding bonds.
BAML priced the Iowa Finance Authority’s $346.26 million of state revolving fund revenue green bonds.
Barclays Capital priced the Board of Regents of the University of Texas System’s $258.76 million of Series 2017C revenue financing system refunding bonds.
Data appearing in this article from Municipal Bond Information Services, including the MBIS municipal bond index, is available on The Bond Buyer Data Workstation. Click here for a brief tour of the Workstation, or contact Vanessa Kim at 212-803-8474 for more information.