The municipal bond market was set for the last of the week's large deals to price on Thursday as traders keep an eye on geopolitical and economic events.
Secondary Market
Treasuries were narrowly mixed on Thursday. The yield on the two-year Treasury fell to 0.80% from 0.82% on Wednesday, while the 10-year Treasury yield rose to 1.98% from 1.97% and the 30-year Treasury bond yield decreased to 2.74% from 2.75%.
Top-quality munis ended higher on Wednesday. The yield on the 10-year benchmark muni general obligation declined four basis points to 1.71% from 1.75% on Tuesday, while the 30-year muni yield dropped two basis points to 2.68% from 2.70%, according to the final read of Municipal Market Data's triple-A scale.
The 10-year muni to Treasury ratio was calculated on Wednesday at 86.0% compared to 85.8% on Tuesday, while the 30-year muni to Treasury ratio stood at 97.0% versus 96.1%, according to MMD.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,441 trades on Wednesday on volume of $7.97 billion.
Primary Market
Citigroup is set to price the New York Triborough Bridge & Tunnel Authority $480.29 million of Series 2016A MTA bridges and tunnels general revenue bonds for institutions on Thursday after a one-day retail order period on Wednesday.
The issue was priced for retail to yield from 0.70% with 3% and 4% coupons in a split 2017 maturity to 2.48% with a 5% coupon in 2031 and from 2.59% with a 5% coupon in 2033 to 2.74% with a 5% coupon in 2036; a 2041 maturity was priced as 5s to yield 2.92% and a 2046 maturity was priced as 5s to yield 2.98%. A 2016 maturity was offered as a sealed bid.
The bonds were rated Aa3 by Moody's and AA-minus by both S&P and Fitch and AA by Kroll Bond Rating Agency.
Since 2006, the TBTA has sold about $8.8 billion of bonds, with the most issuance occurring in 2008 and 2012 when it issued $2.19 billion and $1.79 billion, respectively. The authority has issued bonds roughly three times a year since 2006.
On Thursday, the Board of Regents for the University of Houston will offer two deals totaling $285 million. The BOR will sell $101.15 million of Series 2016A tax-exempt consolidated revenue and refunding bonds and $183.86 million of Series 2016B taxable consolidated revenue and refunding bonds. The bonds are rated Aa2 by Moody's and AA by S&P.
Stifel is slated to price Gwinnet County School District, Ga.'s $330 million of GO sales tax bonds on Thursday. The issue is rated triple-A by Moody's and S&P.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $1.38 billion to $8.17 billion on Thursday. The total is comprised of $3.10 billion competitive sales and $5.08 billion of negotiated deals.
Tax-Exempt Money Market Funds Post Outflows
Tax-exempt money market funds experienced outflows of $2.12 million, bringing total net assets to $255.00 billion in the week ended Jan. 18, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $416.1 million to $257.12 billion in the previous week.
The average, seven-day simple yield for the 359 weekly reporting tax-exempt funds remained at 0.01% for the 142nd straight week.
The total net assets of the 941 weekly reporting taxable money funds decreased $11.43 billion to $2.492 trillion in the week ended Jan. 19, after an inflow of $11.48 billion to $2.504 trillion the prior week.
The average, seven-day simple yield for the taxable money funds increased to 0.08% from 0.07% in the prior week.
Overall, the combined total net assets of the 1,300 weekly reporting money funds fell $13.56 billion to $2.747 trillion in the period ended Jan. 19, which followed an inflow of $11.90 billion to $2.761 trillion in the prior week.
