Municipal bond traders are looking ahead to next week's manageable slate of new issue supply, with no issues topping $350 million.
Secondary Market
Treasury prices were unchanged on Friday with the yield on the two-year Treasury note flat at 0.58% from Thursday, while the 10-year yield stayed at 2.07% and the 30-year yield remained at 2.78%.
On Thursday, the yield on the 10-year benchmark muni general obligation rose five basis points to 2.12% from 2.07% on Wednesday, while the yield on the 30-year GO increased five basis points to 3.05% from 3.00%, according to the final read of Municipal Market Data's triple-A scale. So far this week, the yield on the 10-year muni has risen by 12 basis points while the 30-year yield is up by 15 basis points.
The 10-year muni to Treasury ratio was calculated on Thursday at 104.1% versus 101.8% on Wednesday, while the 30-year muni to Treasury ratio stood at 111.2% compared to 109.5%, according to MMD.
Primary Market
Leading off next week's calendar is a $348 million negotiated deal from the Indiana Finance Authority. Goldman, Sachs is expected to price the stadium project and convention center expansion project bonds on Thursday. The issue is rated Aa2 by Moody's and AA-plus by Standard & Poor's and Fitch Ratings.
Also in the stadium financing sector, Citigroup is scheduled to price on Thursday the Atlanta Development Authority's $200 million of senior lien and second lien tax-exempt and taxable bonds for the new downtown Atlanta stadium project. The senior bonds are rated Aa3 by Moody's and A-plus by S&P while the second lien bonds are rated A1 by Moody's and A by S&P.
Goldman is expected to price the Los Angeles Community College District's $310 million of GOs on Wednesday after a retail order period on Tuesday. The bonds are rated Aa1 by Moody's and AA-plus by S&P.
Goldman is also slated to price the Florida Mid-Bay Bridge Authority's $279 million of tax-exempt and taxable first senior lien revenue bonds and tax-exempt second senior lien revenue bonds on Tuesday. The first senior lien bonds are rated BBB-plus by Moody's and S&P and the second senior lien bonds are rated BBB by Moody's and S&P.
Loop Capital markets is expected to price New York's Triborough Bridge and Tunnel Authority's $250 million Series 2015A general revenue bonds for MTA bridges and tunnels on Thursday after a retail order period on Wednesday. The bonds are rated Aa3 by Moody's, AA-minus by S&P and Fitch and AA by Kroll Bond Rating Agency.
Turning to the competitive arena, the state of Ohio is selling three separate issues totaling $345 million on Tuesday. The issues consist of $300 million of Series 2015B common schools GOs, $35 million of Series T natural resources GOs, and $10 million of Series 2015B taxable higher education GOs. All three issues are rated Aa1 by Moody's and AA-plus by S&P and Fitch.
The last time Ohio competitively sold common school refunding GOs was on Jan. 7 when Wells Fargo Securities won $72.4 million of Series 2015A with a true interest cost of 2.0699%. The last time Ohio competitively sold natural resources GOs was on June 12, 2012, when FTN Financial Capital Markets won $15.8 million of Series R with a TIC of 1.2726%. The last time Ohio competitively sold higher education refunding GOs was on Jan. 7 when PNC Capital Markets won $28.2 million of Series 2015A with a TIC of 2.1132%.
The state of Louisiana is scheduled to sell $335 million of Series 2015A and 2015B various purpose GO refunding bonds on Wednesday. The issue is rated Aa2 by Moody's and AA by S&P and Fitch.
The Los Angeles Unified School District is slated to sell $330 million of Series 2015A GO refunding bonds on Wednesday.
Seattle is set to offer two separate issues totaling $323 million on Wednesday. The sales consist of $157 million of Series 2015 unlimited tax GO improvement bonds and $166 million of Series 2015A limited tax GO improvement and refunding bonds. Both sales are rated Aa1 by Moody's, triple-A by S&P and AA-plus by Fitch.
On Tuesday, the Massachusetts School Building Authority will sell $300 million of Series 2015 senior dedicated sales tax bonds. The issue is rated Aa2 by Moody's.
Tax-Exempt Bond Funds See Inflows
Municipal bond funds which report weekly, posted $481.253 million of inflows in the week ended April 29, after experiencing inflows of $534.645 million in the week ended April 22, according to the latest Lipper data.
The four-week moving average turned positive at $124.194 million in the latest week after being in the red at $71.264 million in the prior week. A moving average is an analytical tool used to smooth out price changes by filtering out fluctuations.
Long-term muni bond funds saw inflows, gaining $304.651 million in the latest week, after experiencing inflows of $551.993 million in the previous week.
High-yield muni funds recorded an inflow of $104.189 million in the latest reporting week, after seeing inflows of $374.224 million in the previous week. Exchange-traded funds had inflows of $80.295 million, after recording inflows of $43.787 million in the previous week.
In contrast, long-term municipal bond mutual funds posted $683 million of inflows in the week ended April 22, according to the Investment Company Institute. ICI reported outflows from long-term funds of $943 million in the previous week.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 42,461 trades on Thursday on volume of $12.552 billion.
The most active bond, based on the number of trades, was the Ohio Higher Educational Facility Commission's higher educational facility revenue bonds for the Kenyon College 2015 project 4s of 2041, which traded 403 times at an average price of 99.728 with an average yield of 4.015%. The bonds were initially priced at 98.089 to yield 4.12%.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar increased $4.202 billion to $12.008 billion on Friday. The total is comprised of $4.857 billion competitive sales and $7.151 billion of negotiated deals.
