The municipal bond market is awaiting the last of the week's big new issue supply on Thursday with issuers from Pennsylvania and California topping the calendar.
Secondary Market
Treasury prices were higher on Thursday as the yield on the two-year Treasury note dropped to 0.56% from 0.58% on Wednesday, while the 10-year yield declined to 2.27% from 2.28% and the 30-year yield decreased to 3.06% from 3.07%.
The yield on the 10-year benchmark muni general obligation on Wednesday was flat from 2.24% on Tuesday, while the yield on the 30-year GO was up by two basis points to 3.23% from 3.21%, according to the final read of Municipal Market Data's triple-A scale. Secondary trading was light, according to Interactive Data.
The 10-year muni to Treasury ratio was calculated on Wednesday at 98.2% versus 99.2% on Tuesday, while the 30-year muni to Treasury ratio stood at 105.2% compared to 106.5%, according to MMD.
Primary Market
On Thursday, the Pennsylvania Turnpike Commission's $495.56 million of Series 2015A turnpike revenue bonds are set to be priced by Loop Capital Markets. The issue is expected to consist of $379.92 million fix-rated Series A-1 bonds and $115.64 million of Series A-2 SIFMA floating-rate notes. The issue is rated A1 by Moody's and A-plus by S&P and Fitch.
In the competitive arena, the Santa Clara Unified School District, Calif., is selling two separate offerings totaling $243.45 million. The issues are comprised of $140.7 million of Series 2015 election of 2014 GO refunding bonds and $102.75 million of Series 2015 GO refunding bonds. Both sales are rated AA by S&P.
Also on Thursday, Milwaukee will sell a $166.11 million single issue consisting of $137.54 million Series 1015 N2 GO promissory notes and $28.57 million of Series 2015 B3 GO corporate purpose bonds. The issue is rated AA by Fitch. Milwaukee will also sell $125 million Series 2015 R1 revenue anticipation notes. The RANs are rated F1-plus by Fitch.
Tax-Exempt Money Market Funds Post Outflow
Tax-exempt money market funds reversed course and experienced outflows of $1.32 billion, bringing total net assets to $244.52 billion in the period ended May 11, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $1.16 billion to $245.84 billion in the previous week.
The average, seven-day simple yield for the 395 weekly reporting tax-exempt funds remained at 0.01% for a 106th straight week.
The total net assets of the 990 weekly reporting taxable money funds fell $6.99 billion to $2.376 trillion in the period ended May 12, after experiencing an inflow of $7.82 billion to $2.383 trillion in the prior week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 16th consecutive week.
Overall, the combined total net assets of the 1,385 weekly reporting money funds decreased $8.32 billion to $2.621 trillion in the period ended May 12, which followed an inflow of $8.98 billion to $2.629 trillion in the prior period.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar decreased $1.836 billion to $11.753 billion on Thursday. The total is comprised of $4.139 billion competitive sales and $7.614 billion of negotiated deals.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 45,974 trades on Wednesday on volume of $45.974 billion.
The most active bond, based on the number of trades, was the Calabasas, Calif.'s 2015 certificates of participation for the Civic Center project 4s of 2041, which traded 160 times at an average price of 100.389 with an average yield of 3.945%. The bonds were initially priced at 100.00 to yield 4.00%.
