Municipal bonds ended stronger on Thursday as the last big deals of the week hit the market, led by the institutional pricing of Massachusetts and California offerings.
Citigroup priced Massachusetts’ $767.97 million of general obligation bonds for institutions after a retail order period on Wednesday.
The $400 million of Series A consolidated loan of 2017 GOs were priced for institutions as 5s to yield from 2.88% in 2032 to 3.11% in 2037. A split 2042 maturity was priced as 5s to yield 3.20% and as 5 1/4s to yield 3.07% and a split 2047 maturity was priced as 5s to yield 3.25% and as 5 1/4s to yield 3.12%
The $100 million of Series B consolidated loan of 2017 green bond GOs were priced for institutions as 5s to yield from 1.79% in 2023 to 2.40% in 2027, 3.11% in 2037 and 3.25% in 2047.
The $267.97 million of Series C consolidated loan of 2017 refunding GOs were priced for institutions as 5s to yield 0.75% in 2017 and to yield from 1.69% in 2022 to 2.44% in 2027.
The Massachusetts deal is rated Aa1 by Moody’s Investors Service and AA-plus by S&P Global Ratings and Fitch Ratings.
Bank of America Merrill Lynch priced the California State Public Works Board’s $534.995 million of Series 2017 B&C various capital lease revenue refunding bonds for institutions after holding a one-day retail order period.
The $378.27 million of Series 2017B bonds were priced for institutions as 5s to yield from 0.85% in 2017 to 2.96% in 2030.
The $156.725 million of Series 2017C bonds were priced for institutions to yield from 0.90% with a 3% coupon in 2018 to 3.28% with a 5% coupon in 2035.
The deal is rated A1 by Moody’s and A-plus by S&P and Fitch.
Since 2007, the board has sold about $13.4 billion of bonds, with the most issuance occurring in 2009 when it offered $2.19 billion of debt. The low year of issuance came in 2008, when it sold $365 million, one of only four times during that period when it sold less than $1 billion in a calendar year.
BAML also priced the Maryland Department of Housing and Community Development’s $263.06 million of Series 2017 taxable residential revenue bonds.
The taxables were priced at par to yield from 1% in 2017 to 3.653% in 2018, 4.103% in 2032, 4.416% in 2037 and 3.242% in a planned amortization class 2048 maturity.
The deal is rated Aa2 by Moody’s and AA by Fitch
RBC Capital Markets priced the Desert Community College District, Calif.’s $125.31 million of Series 2017 crossover refunding GO refunding bonds.
The issue was priced to yield from 0.92% with a 2% coupon in 2018 to 2.81% with a 5% coupon in 2031; a 2033 maturity was priced as 5s to yield 2.95% and a 2039 maturity was priced as 4s to yield 3.63%.
The deal is rated Aa2 by Moody’s and AA by S&P.
Top-rated municipal bonds ended stronger on Thursday.
The yield on the 10-year benchmark muni general obligation fell one basis point to 2.19% from 2.20% on Wednesday, while the 30-year GO yield dropped one basis point to 2.99% from 3.00%, according to the final read of Municipal Market Data's triple-A scale.
U.S. Treasuries were mixed on Thursday. The yield on the two-year dipped to 1.24% from 1.25% on Wednesday, while the 10-year Treasury yield dropped to 2.34% from 2.36%, and the yield on the 30-year Treasury bond decreased to 2.99% from 3.01%.
The 10-year muni to Treasury ratio was calculated at 93.5% on Thursday compared to 93.6% on Wednesday, while the 30-year muni to Treasury ratio stood at 100.0%, versus 99.9%, according to MMD.
MSRB: Previous Session's Activity
The Municipal Securities Rulemaking Board reported 46,166 trades on Wednesday on volume of $13.69 billion.
Tax-Exempt Money Market Fund Inflows
Tax-exempt money market funds experienced inflows of $92.4 million, bringing total net assets to $130.24 billion in the week ended April 3, according to The Money Fund Report, a service of iMoneyNet.com.
This followed an outflow of $949.2 million to $130.15 billion in the previous week.
The average, seven-day simple yield for the 232 weekly reporting tax-exempt funds rose to 0.39% from 0.32% in the previous week.
The total net assets of the 862 weekly reporting taxable money funds decreased $12.97 billion to $2.489 trillion in the week ended April 4, after an inflow of $6.42 billion to $2.502 trillion the week before.
The average, seven-day simple yield for the taxable money funds increased to 0.40% from 0.38% in the prior week.
Overall, the combined total net assets of the 1,092 weekly reporting money funds decreased $12.87 billion to $2.619 trillion in the week ended April 4, after inflows of $5.47 billion to $2.632 trillion in the prior week.