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.

Primary Market
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.

Secondary Market
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.

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Chip Barnett

Chip Barnett

Chip Barnett is a journalist with more than 40 years of experience. Barnett is currently Senior Market Reporter for The Bond Buyer.
Aaron Weitzman

Aaron Weitzman

Aaron Weitzman is a markets reporter for The Bond Buyer, focusing on the sell side of the municipal bond market.