The municipal bond market is girding itself for a third day of a supply surge as deals from the Illinois Finance Authority, the Oklahoma Turnpike Authority and San Jose are set to come its way.

Secondary market
The MBIS municipal non-callable 5% GO benchmark scale was stronger in early trading.

The 10-year muni benchmark yield fell to 2.178% on Thursday from the final read of 2.204% on Tuesday, according to Municipal Bond Information Services. The MBIS 30-year benchmark muni yield decreased to 2.644% from 2.688%.

The MBIS benchmark index is updated hourly on the Bond Buyer Data Workstation.

U.S. Treasuries were little changed on Thursday. The yield on the two-year Treasury inched up to 1.81% from 1.80%, the 10-year Treasury yield was flat from 2.33% and the yield on the 30-year Treasury was steady from 2.71%.

Top-rated municipals finished substantially stronger on Wednesday. The yield on the 10-year benchmark muni general obligation fell 11 basis points to 1.88% from 1.99% on Tuesday, while the 30-year GO yield dropped 12 basis points to 2.46% from 2.58%, according to the final read of MMD’s triple-A scale.

On Wednesday, the 10-year muni-to-Treasury ratio was calculated at 83.9% compared with 84.4% on Tuesday, while the 30-year muni-to-Treasury ratio stood at 95.9% versus 94.3%, according to MMD.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 51,283 trades on Wednesday on volume of $17.99 billion.

Primary market
Stifel is expected to price the city of San Jose, Calif., Redevelopment Agency Successor’s $1.34 billion of senior taxable tax allocation refunding bonds.

An indications of interest wire on Wednesday had the 2018 maturity at about 20 basis points above the comparable Treasury to about 120 basis points above comparable Treasury in 2029. A term bond in 2034 was at about 100 basis points above comparable Treasury.

The deal is rated AA by S&P Global Ratings and Fitch Ratings.

RBC Capital Markets is set to price the Pennsylvania Housing Finance Agency’s $300.21 million of single-family mortgage revenue bonds for institutions after holding a one-day retail order period.

The $175.21 million of Series 2017-125A bonds subject to the alternative minimum tax were priced for retail at par to yield 1.50% and 1.55% in a split 2018 maturity and from 2.90% and 2.95% in a split 2026 maturity to 3.15% and 3.20% in a split 2028 maturity, and 3.45% in 2032 and 3.70% in 2037. A 2025 maturity was not offered to retail investors.

The $125 million of Series 2017-125B non-AMT bonds were priced for retail at par to yield 3.65% in 2042 and 3.70% in 2047.

The deal is rated Aa2 by Moody’s Investors Service and AA-plus by S&P.

JPMorgan is expected to price the Illinois Finance Authority’s $686.61 million of Series 2017A&B revenue bonds for Northwestern Memorial Healthcare.

The deal is rated Aa2 by Moody’s and AA-plus by S&P.

Since 2007, the Illinois Finance Authority has issued roughly $27.77 billion of bonds, with the most issuance occurring in 2008 when it sold $4.6 billion of bonds. The authority saw a low year of issuance in 2014 when it sold $1.09 billion.

RBC Capital Markets is expected to price the Oklahoma Turnpike Authority’s $685.91 million of turnpike system bonds.

The deal is rated Aa3 by Moody’s and AA-minus by S&P and Fitch.

In the competitive arena, the Florida Board of Education is selling $271.395 million of Series 2017C public education capital outlay refunding bonds.

The deal is rated Aa1 by Moody’s and AAA by S&P and Fitch.

Bond Buyer 30-day visible supply at $15.95B
The Bond Buyer's 30-day visible supply calendar decreased $2.66 billion to $15.95 billion on Thursday. The total is comprised of $5.08 billion of competitive sales and $10.87 billion of negotiated deals.

Tax-exempt money market funds saw inflows
Tax-exempt money market funds experienced inflows of $1.06 billion, bringing total net assets to $130.23 billion in the week ended Dec. 4, according to The Money Fund Report, a service of iMoneyNet.com. This followed an outflow of $596.3 million to $129.17 billion in the previous week.

The average, seven-day simple yield for the 199 weekly reporting tax-exempt funds increased to 0.51% from 0.50% in the previous week.

The total net assets of the 831 weekly reporting taxable money funds increased $18.54 billion to $2.648 trillion in the week ended Dec. 5, after an inflow of $22.77 billion to $2.629 trillion the week before.

The average, seven-day simple yield for the taxable money funds rose to 0.74% from 0.73% from the prior week.

Overall, the combined total net assets of the 1,030 weekly reporting money funds increased $19.60 billion to $2.778 trillion in the week ended Dec. 5, after inflows of $22.18 billion to $2.758 trillion in the prior week.

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.

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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.